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Role of green bonds in energy transition and environmental sustainability

Author

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  • Ullah, Farid
  • Lu, Qianjin
  • Jie, Chen
  • Ullah, Mirzat

Abstract

This research aims to assess the nexus between green bonds, environmental sustainability and energy transition in BRICS-Plus countries using annual data from 2000 to 2023. Specifically, the study examines the impact of green bonds issued to support clean energy sources including geothermal, solar, hydropower, and wind power, alongside key macroeconomic indicators such as quality of financial institutions, population and national income. Using multiple estimation methods, this study found multifaceted relationships among the underlined variables. This study demonstrates that green bonds are the potential driver of clean energy initiatives, with 1 % increase in issuance accelerating the transition by 1.5 %. Green bonds are shown to stimulate clean energy investments that contribute to reduction in carbon emissions. This study offers valuable policy insights for investors and regulators to support sustainable practices and optimize the allocation of financial resources.

Suggested Citation

  • Ullah, Farid & Lu, Qianjin & Jie, Chen & Ullah, Mirzat, 2026. "Role of green bonds in energy transition and environmental sustainability," Energy, Elsevier, vol. 342(C).
    • Handle: RePEc:eee:energy:v:342:y:2026:i:c:s0360544225052776
    DOI: 10.1016/j.energy.2025.139635
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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