IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v76y2022icp488-501.html
   My bibliography  Save this article

Enhancing green economic recovery through green bonds financing and energy efficiency investments

Author

Listed:
  • Zhao, Linhai
  • Chau, Ka Yin
  • Tran, Trung Kien
  • Sadiq, Muhammad
  • Xuyen, Nguyen Thi My
  • Phan, Thi Thu Hien

Abstract

This study investigates the effect of green-bond financing on energy efficiency investment for green economic recovery. The fuzzy Analytic Hierarchy Process (AHP) technique was used to achieve the research objective. The study’s findings showed that green bonds are currently the primary financing source for energy efficiency projects, enhancing economic growth by 4.9% and potentially increasing green economic recovery by approximately 17% per annum. The fuzzy analysis technique and alternative models of fuzzy modeling were applied in this study. An alternative to project-based financing is energy performance contracts (EPCs). Green bonds also invest in public and private funds for energy efficiency and economic growth. Alternatively, such bonds may finance environmental initiatives or companies. Testing energy-efficiency projects with low payback rates may be expensive. Expanding the green economy through green bonds is essential for financing to successfully promote energy efficiency finance and green growth. This study also has policy implications for stakeholders.

Suggested Citation

  • Zhao, Linhai & Chau, Ka Yin & Tran, Trung Kien & Sadiq, Muhammad & Xuyen, Nguyen Thi My & Phan, Thi Thu Hien, 2022. "Enhancing green economic recovery through green bonds financing and energy efficiency investments," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 488-501.
    • Handle: RePEc:eee:ecanpo:v:76:y:2022:i:c:p:488-501
    DOI: 10.1016/j.eap.2022.08.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592622001369
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2022.08.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ghosh, Saibal, 2018. "Bad luck, Bad policy or Bad banking? Understanding the financial management behavior of MENA banks," Journal of Multinational Financial Management, Elsevier, vol. 47, pages 110-128.
    2. Stulz, René M., 1984. "Optimal Hedging Policies," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 19(2), pages 127-140, June.
    3. Sinha, Avik & Mishra, Shekhar & Sharif, Arshian & Yarovaya, Larisa, 2021. "Does Green Financing help to improve the Environmental & Social Responsibility? Designing SDG framework through Advanced Quantile modelling," MPRA Paper 108150, University Library of Munich, Germany, revised 2021.
    4. Kim, Young Sang & Mathur, Ike & Nam, Jouahn, 2006. "Is operational hedging a substitute for or a complement to financial hedging?," Journal of Corporate Finance, Elsevier, vol. 12(4), pages 834-853, September.
    5. Yann Braouezec & Robert Joliet, 2019. "Time to invest in corporate social responsibility and the value of CSR operations: The case of environmental externalities," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(5), pages 539-549, July.
    6. Rathore, Pushpendra Kumar Singh & Chauhan, Durg Singh & Singh, Rudra Pratap, 2019. "Decentralized solar rooftop photovoltaic in India: On the path of sustainable energy security," Renewable Energy, Elsevier, vol. 131(C), pages 297-307.
    7. Caroline Flammer, 2020. "Green Bonds: Effectiveness and Implications for Public Policy," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 1(1), pages 95-128.
    8. Muhammad Mohsin & Han Phoumin & Ik Joong Youn & Farhad Taghizadeh-Hesary, 2021. "Enhancing Energy and Environmental Efficiency in the Power Sectors: A Case Study of Singapore and China," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 23(03n04), pages 1-26, December.
    9. Naoyuki Yoshino & Ehsan Rasoulinezhad & Farhad Taghizadeh-Hesary, 2021. "Economic Impacts of Carbon Tax in a General Equilibrium Framework: Empirical Study of Japan," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 23(01n02), pages 1-25, June.
    10. Day, Rosie & Walker, Gordon & Simcock, Neil, 2016. "Conceptualising energy use and energy poverty using a capabilities framework," Energy Policy, Elsevier, vol. 93(C), pages 255-264.
    11. Bekiros, Stelios & Gupta, Rangan & Majumdar, Anandamayee, 2016. "Incorporating economic policy uncertainty in US equity premium models: A nonlinear predictability analysis," Finance Research Letters, Elsevier, vol. 18(C), pages 291-296.
    12. Fauver, Larry & Naranjo, Andy, 2010. "Derivative usage and firm value: The influence of agency costs and monitoring problems," Journal of Corporate Finance, Elsevier, vol. 16(5), pages 719-735, December.
    13. Lang, Tillmann & Ammann, David & Girod, Bastien, 2016. "Profitability in absence of subsidies: A techno-economic analysis of rooftop photovoltaic self-consumption in residential and commercial buildings," Renewable Energy, Elsevier, vol. 87(P1), pages 77-87.
    14. Xiao, Zhijie, 2009. "Quantile cointegrating regression," Journal of Econometrics, Elsevier, vol. 150(2), pages 248-260, June.
    15. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    16. Farhad Taghizadeh-Hesary & Abdulrasheed Zakari & Rafael Alvarado & Vincent Tawiah, 2022. "The green bond market and its use for energy efficiency finance in Africa," China Finance Review International, Emerald Group Publishing Limited, vol. 12(2), pages 241-260, March.
    17. Hyun Jeong Kim & Jong Chil Son & Myung-Soo Yie, 2017. "House Price Dynamics with Household Debt: The Korean Case-super-," Asian Economic Journal, East Asian Economic Association, vol. 31(1), pages 39-59, March.
    18. Balcilar, Mehmet & Gupta, Rangan & Pierdzioch, Christian, 2016. "Does uncertainty move the gold price? New evidence from a nonparametric causality-in-quantiles test," Resources Policy, Elsevier, vol. 49(C), pages 74-80.
    19. Setyawati, Dinita, 2020. "Analysis of perceptions towards the rooftop photovoltaic solar system policy in Indonesia," Energy Policy, Elsevier, vol. 144(C).
    20. Lacal Arantegui, Roberto & Jäger-Waldau, Arnulf, 2018. "Photovoltaics and wind status in the European Union after the Paris Agreement," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2460-2471.
    21. Zhou, Nan & Levine, Mark D. & Price, Lynn, 2010. "Overview of current energy-efficiency policies in China," Energy Policy, Elsevier, vol. 38(11), pages 6439-6452, November.
    22. Waddams Price, Catherine & Brazier, Karl & Wang, Wenjia, 2012. "Objective and subjective measures of fuel poverty," Energy Policy, Elsevier, vol. 49(C), pages 33-39.
    23. Sefa Awaworyi Churchill, 2017. "Microfinance and Ethnic Diversity," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 112-141, March.
    24. Healy, John D. & Clinch, J. Peter, 2004. "Quantifying the severity of fuel poverty, its relationship with poor housing and reasons for non-investment in energy-saving measures in Ireland," Energy Policy, Elsevier, vol. 32(2), pages 207-220, January.
    25. Wu, Ji & Chen, Minghua & Jeon, Bang Nam & Wang, Rui, 2017. "Does foreign bank penetration affect the risk of domestic banks? Evidence from emerging economies," Journal of Financial Stability, Elsevier, vol. 31(C), pages 45-61.
    26. Khanna, Rupali A. & Li, Yanfei & Mhaisalkar, Subodh & Kumar, Mahesh & Liang, Lim Jia, 2019. "Comprehensive energy poverty index: Measuring energy poverty and identifying micro-level solutions in South and Southeast Asia," Energy Policy, Elsevier, vol. 132(C), pages 379-391.
    27. Lau, Chee Kwong, 2016. "How corporate derivatives use impact firm performance?," Pacific-Basin Finance Journal, Elsevier, vol. 40(PA), pages 102-114.
    28. Falchetta, Giacomo & Mistry, Malcolm N., 2021. "The role of residential air circulation and cooling demand for electrification planning: Implications of climate change in sub-Saharan Africa," Energy Economics, Elsevier, vol. 99(C).
    29. Marti­nez, Daniel M. & Ebenhack, Ben W., 2008. "Understanding the role of energy consumption in human development through the use of saturation phenomena," Energy Policy, Elsevier, vol. 36(4), pages 1430-1435, April.
    30. Rose, Adam, 1990. "Reducing conflict in global warming policy : The potential of equity as a unifying principle," Energy Policy, Elsevier, vol. 18(10), pages 927-935, December.
    31. Pyrgou, Andri & Kylili, Angeliki & Fokaides, Paris A., 2016. "The future of the Feed-in Tariff (FiT) scheme in Europe: The case of photovoltaics," Energy Policy, Elsevier, vol. 95(C), pages 94-102.
    32. Du, Jiangze & Wang, Jying-Nan & Hsu, Yuan-Teng & Lai, Kin Keung, 2018. "The importance of hedging currency risk: Evidence from CNY and CNH," Economic Modelling, Elsevier, vol. 75(C), pages 81-92.
    33. Hayne E. Leland., 1998. "Agency Costs, Risk Management, and Capital Structure," Research Program in Finance Working Papers RPF-278, University of California at Berkeley.
    34. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    35. Choi, Jongmoo Jay & Jiang, Cao, 2009. "Does multinationality matter? Implications of operational hedging for the exchange risk exposure," Journal of Banking & Finance, Elsevier, vol. 33(11), pages 1973-1982, November.
    36. Luthander, Rasmus & Widén, Joakim & Munkhammar, Joakim & Lingfors, David, 2016. "Self-consumption enhancement and peak shaving of residential photovoltaics using storage and curtailment," Energy, Elsevier, vol. 112(C), pages 221-231.
    37. Ramli, Makbul A.M. & Hiendro, Ayong & Sedraoui, Khaled & Twaha, Ssennoga, 2015. "Optimal sizing of grid-connected photovoltaic energy system in Saudi Arabia," Renewable Energy, Elsevier, vol. 75(C), pages 489-495.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luo, Shunjun & Zhang, Shaohui, 2022. "How R&D expenditure intermediate as a new determinants for low carbon energy transition in Belt and Road Initiative economies," Renewable Energy, Elsevier, vol. 197(C), pages 101-109.
    2. Chang, Lei & Shi, Fanglan & Taghizadeh-Hesary, Farhad & Saydaliev, Hayot Berk, 2023. "Information and communication technologies development and the resource curse," Resources Policy, Elsevier, vol. 80(C).
    3. Ma, Cong & Cheok, Mui Yee, 2022. "The impact of financing role and organizational culture in small and medium enterprises: Developing business strategies for economic recovery," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 26-38.
    4. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "The post COVID-19 green recovery in practice: Assessing the profitability of a policy proposal on residential photovoltaic plants," Energy Policy, Elsevier, vol. 147(C).
    5. Luo, Hang (Robin) & Wang, Rui, 2018. "Foreign currency risk hedging and firm value in China," Journal of Multinational Financial Management, Elsevier, vol. 47, pages 129-143.
    6. Chang, Lei & Gan, Xiaojun & Mohsin, Muhammad, 2022. "Studying corporate liquidity and regulatory responses for economic recovery in COVID-19 crises," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 211-225.
    7. Sinha, Avik & Mishra, Shekhar & Sharif, Arshian & Yarovaya, Larisa, 2021. "Does Green Financing help to improve the Environmental & Social Responsibility? Designing SDG framework through Advanced Quantile modelling," MPRA Paper 108150, University Library of Munich, Germany, revised 2021.
    8. D’Adamo, Idiano & Falcone, Pasquale Marcello & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "The economic viability of photovoltaic systems in public buildings: Evidence from Italy," Energy, Elsevier, vol. 207(C).
    9. Zhen Liu & Trong Lam Vu & Thi Thu Hien Phan & Thanh Quang Ngo & Nguyen Ho Viet Anh & Ahmad Romadhoni Surya Putra, 2022. "Financial inclusion and green economic performance for energy efficiency finance," Economic Change and Restructuring, Springer, vol. 55(4), pages 2359-2389, November.
    10. Chang, Lei & Qian, Chong & Dilanchiev, Azer, 2022. "Nexus between financial development and renewable energy: Empirical evidence from nonlinear autoregression distributed lag," Renewable Energy, Elsevier, vol. 193(C), pages 475-483.
    11. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "Solar collective self-consumption: Economic analysis of a policy mix," Ecological Economics, Elsevier, vol. 199(C).
    12. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe & Ozturk, Ilhan, 2022. "Economics and policy implications of residential photovoltaic systems in Italy's developed market," Utilities Policy, Elsevier, vol. 79(C).
    13. Awaworyi Churchill, Sefa & Smyth, Russell, 2020. "Ethnic diversity, energy poverty and the mediating role of trust: Evidence from household panel data for Australia11We thank two referees for constructive comments. This article uses unit record data ," Energy Economics, Elsevier, vol. 86(C).
    14. Hadian, Azadeh & Adaoglu, Cahit, 2020. "The effects of financial and operational hedging on company value: The case of Malaysian multinationals," Journal of Asian Economics, Elsevier, vol. 70(C).
    15. Wan, Qilong & Qian, Jine & Baghirli, Araz & Aghayev, Aligul, 2022. "Green finance and carbon reduction: Implications for green recovery," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 901-913.
    16. Tomiwa Sunday Adebayo & Seyi Saint Akadiri & Usenobong Akpan & Bisola Aladenika, 2023. "Asymmetric effect of financial globalization on carbon emissions in G7 countries: Fresh insight from quantile-on-quantile regression," Energy & Environment, , vol. 34(5), pages 1285-1304, August.
    17. Charlier, Dorothée & Legendre, Bérangère, 2021. "Fuel poverty in industrialized countries: Definition, measures and policy implications a review," Energy, Elsevier, vol. 236(C).
    18. D'Adamo, Idiano & Mammetti, Marco & Ottaviani, Dario & Ozturk, Ilhan, 2023. "Photovoltaic systems and sustainable communities: New social models for ecological transition. The impact of incentive policies in profitability analyses," Renewable Energy, Elsevier, vol. 202(C), pages 1291-1304.
    19. Lau, Chee Kwong, 2016. "How corporate derivatives use impact firm performance?," Pacific-Basin Finance Journal, Elsevier, vol. 40(PA), pages 102-114.
    20. Mishra, Shekhar & Sharif, Arshian & Khuntia, Sashikanta & Meo, Muhammad Saeed & Rehman Khan, Syed Abdul, 2019. "Does oil prices impede Islamic stock indices? Fresh insights from wavelet-based quantile-on-quantile approach," Resources Policy, Elsevier, vol. 62(C), pages 292-304.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:76:y:2022:i:c:p:488-501. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.