IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v88y2024ics0301420723011352.html
   My bibliography  Save this article

Do natural resources promote carbon neutrality: The role of green finance

Author

Listed:
  • Yu, Zhong

Abstract

This study investigates the relationship between carbon emissions and key economic variables in China from 2000Q1 to 2020Q4, using the ARDL method. It reveals that while gross domestic product (GDP) increases emissions, its square inversely affects them, aligning with the Environmental Kuznets Curve (EKC) hypothesis. Natural Resource Rent (NRR) positively impacts emissions, but its combination with green finance yields a mitigating effect.The research's robustness is evident from a high R-squared value of 0.95, a significant F-statistic, and a Durbin-Watson statistic of 2.11, which collectively negate concerns of autocorrelation, serial correlation, heteroskedasticity, and parameter instability. In the short term, all variables maintain their relevance, suggesting equilibrium.This study contributes to the understanding of green finance's interaction with GDP growth, NRR, and carbon emissions in China. It indicates that green finance can offset the adverse environmental effects of NRR. Highlighting the importance of green finance initiatives and policies, this research underscores their role in sustainable development and environmental mitigation, suggesting their criticality in achieving carbon neutrality.

Suggested Citation

  • Yu, Zhong, 2024. "Do natural resources promote carbon neutrality: The role of green finance," Resources Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011352
    DOI: 10.1016/j.resourpol.2023.104424
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723011352
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104424?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. Yang, Yuxue & Su, Xiang & Yao, Shuangliang, 2021. "Nexus between green finance, fintech, and high-quality economic development: Empirical evidence from China," Resources Policy, Elsevier, vol. 74(C).
    2. Ma, Mengjuan & Zhu, Xiao & Liu, Meishan & Huang, Xiaodong, 2023. "Combining the role of green finance and environmental sustainability on green economic growth: Evidence from G-20 economies," Renewable Energy, Elsevier, vol. 207(C), pages 128-136.
    3. Daniel Gallardo-Albarrán & Herman de Jong, 2021. "Optimism or pessimism? A composite view on English living standards during the Industrial Revolution," European Review of Economic History, European Historical Economics Society, vol. 25(1), pages 1-19.
    4. Frodyma, Katarzyna & Papież, Monika & Śmiech, Sławomir, 2022. "Revisiting the Environmental Kuznets Curve in the European Union countries," Energy, Elsevier, vol. 241(C).
    5. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    6. Alina Herrmann & Rainer Sauerborn & Maria Nilsson, 2020. "The Role of Health in Households’ Balancing Act for Lifestyles Compatible with the Paris Agreement—Qualitative Results from Mannheim, Germany," IJERPH, MDPI, vol. 17(4), pages 1-24, February.
    7. Vitaly Kaftan & Wadim Kandalov & Igor Molodtsov & Anna Sherstobitova & Wadim Strielkowski, 2023. "Socio-Economic Stability and Sustainable Development in the Post-COVID Era: Lessons for the Business and Economic Leaders," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    8. Nwani, Chinazaekpere & Adams, Samuel, 2021. "Environmental cost of natural resource rents based on production and consumption inventories of carbon emissions: Assessing the role of institutional quality," Resources Policy, Elsevier, vol. 74(C).
    9. Xin-Yu Wang & Guang Li & Summaira Malik & Ahsan Anwar, 2022. "Impact of COVID-19 on achieving the goal of sustainable development: E-learning and educational productivity," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 1950-1966, December.
    10. Huang, Yongming & Faraz Raza, Syed Muhammad & Usman, Muhammad, 2023. "Asymmetric role of natural resources dependence, industrialization, and foreign direct investment in China’s economic growth," Resources Policy, Elsevier, vol. 85(PB).
    11. Huang, Yongming & Raza, Syed Muhammad Faraz & Hanif, Imran & Alharthi, Majed & Abbas, Qaiser & Zain-ul-Abidin, Syed, 2020. "The role of forest resources, mineral resources, and oil extraction in economic progress of developing Asian economies," Resources Policy, Elsevier, vol. 69(C).
    12. Sanjay Taneja & Mukul Bhatnagar & Pawan Kumar & Ramona Rupeika-Apoga, 2023. "India’s Total Natural Resource Rents (NRR) and GDP: An Augmented Autoregressive Distributed Lag (ARDL) Bound Test," JRFM, MDPI, vol. 16(2), pages 1-14, February.
    13. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    14. Arestis, Philip & Demetriades, Panicos O, 1997. "Financial Development and Economic Growth: Assessing the Evidence," Economic Journal, Royal Economic Society, vol. 107(442), pages 783-799, May.
    15. Xiaojun Sun & Jing Tang & Shilong Li, 2022. "Promote Green Innovation in Manufacturing Enterprises in the Aspect of Government Subsidies in China," IJERPH, MDPI, vol. 19(13), pages 1-16, June.
    16. Chauvy, Remi & Meunier, Nicolas & Thomas, Diane & De Weireld, Guy, 2019. "Selecting emerging CO2 utilization products for short- to mid-term deployment," Applied Energy, Elsevier, vol. 236(C), pages 662-680.
    17. Adebayo, Tomiwa Sunday & Onifade, Stephen Taiwo & Alola, Andrew Adewale & Muoneke, Obumneke Bob, 2022. "Does it take international integration of natural resources to ascend the ladder of environmental quality in the newly industrialized countries?," Resources Policy, Elsevier, vol. 76(C).
    18. Yanqi Cai & Junwei Xu & Paiman Ahmad & Ahsan Anwar, 2022. "What drives carbon emissions in the long-run? The role of renewable energy and agriculture in achieving the sustainable development goals," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 4603-4624, December.
    19. Jun Zhao & Farhad Taghizadeh-Hesary & Kangyin Dong & Xiucheng Dong, 2023. "How green growth affects carbon emissions in China: the role of green finance," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 2090-2111, March.
    20. Anwar, Ahsan & Sharif, Arshian & Fatima, Saba & Ahmad, Paiman & Sinha, Avik & Khan, Syed Abdul Rehman & Jermsittiparsert, Kittisak, 2021. "The asymmetric effect of public private partnership investment on transport CO2 emission in China: Evidence from quantile ARDL approach," MPRA Paper 108160, University Library of Munich, Germany, revised 2021.
    21. Abbasi, Kashif Raza & Shahbaz, Muhammad & Zhang, Jinjun & Irfan, Muhammad & Alvarado, Rafael, 2022. "Analyze the environmental sustainability factors of China: The role of fossil fuel energy and renewable energy," Renewable Energy, Elsevier, vol. 187(C), pages 390-402.
    22. Xu, Yong & Li, Shanshan & Zhou, Xiaoxiao & Shahzad, Umer & Zhao, Xin, 2022. "How environmental regulations affect the development of green finance: Recent evidence from polluting firms in China," Renewable Energy, Elsevier, vol. 189(C), pages 917-926.
    23. Ahsan Anwar & Avik Sinha & Arshian Sharif & Muhammad Siddique & Shoaib Irshad & Waseem Anwar & Summaira Malik, 2022. "The nexus between urbanization, renewable energy consumption, financial development, and CO2 emissions: evidence from selected Asian countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6556-6576, May.
    24. Jiancheng Bai & Zhonglu Chen & Xiang Yan & Yueyan Zhang, 2022. "Research on the impact of green finance on carbon emissions: evidence from China," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 6965-6984, December.
    25. John Freebairn, 2012. "Policy Forum: Designing a Carbon Price Policy: Reducing Greenhouse Gas Emissions at the Lowest Cost," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(1), pages 96-104, February.
    26. Jahanger, Atif & Hossain, Mohammad Razib & Usman, Muhammad & Chukwuma Onwe, Joshua, 2023. "Recent scenario and nexus between natural resource dependence, energy use and pollution cycles in BRICS region: Does the mediating role of human capital exist?," Resources Policy, Elsevier, vol. 81(C).
    27. Liang, Yunbao & Galiano, Jesus Cantero & Zhou, Hongxia, 2023. "The environmental impact of stock market capitalization and energy transition: Natural resource dynamics and international trade," Utilities Policy, Elsevier, vol. 82(C).
    28. Li Liu & Ahsan Anwar & Esma Irmak & Irem Pelit, 2022. "Asymmetric linkages between public-private partnership, environmental innovation, and transport emissions," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 6519-6540, December.
    29. Gong, Qinyi & Ying, Limeng & Dai, Jiapeng, 2023. "Green finance and energy natural resources nexus with economic performance: A novel evidence from China," Resources Policy, Elsevier, vol. 84(C).
    30. Chien, Fengsheng & Ajaz, Tahseen & Andlib, Zubaria & Chau, Ka Yin & Ahmad, Paiman & Sharif, Arshian, 2021. "The role of technology innovation, renewable energy and globalization in reducing environmental degradation in Pakistan: A step towards sustainable environment," Renewable Energy, Elsevier, vol. 177(C), pages 308-317.
    31. Hyoungkun Park & Jong Dae Kim, 2020. "Transition towards green banking: role of financial regulators and financial institutions," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 5(1), pages 1-25, December.
    32. Jahanger, Atif & Yu, Yang & Hossain, Mohammad Razib & Murshed, Muntasir & Balsalobre-Lorente, Daniel & Khan, Uzma, 2022. "Going away or going green in NAFTA nations? Linking natural resources, energy utilization, and environmental sustainability through the lens of the EKC hypothesis," Resources Policy, Elsevier, vol. 79(C).
    33. Li, Tianyu & Umar, Muhammad & Mirza, Nawazish & Yue, Xiao-Guang, 2023. "Green financing and resources utilization: A story of N-11 economies in the climate change era," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1174-1184.
    34. Li, Xiaolong & Ozturk, Ilhan & Ullah, Sana & Andlib, Zubaria & Hafeez, Muhammad, 2022. "Can top-pollutant economies shift some burden through insurance sector development for sustainable development?," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 326-336.
    35. Mattia De Rosa & Vincenzo Bianco & Henrik Barth & Patricia Pereira da Silva & Carlos Vargas Salgado & Fabiano Pallonetto, 2023. "Technologies and Strategies to Support Energy Transition in Urban Building and Transportation Sectors," Energies, MDPI, vol. 16(11), pages 1-16, May.
    36. Sun, Yunpeng & Li, Haoning & Andlib, Zubaria & Genie, Mesfin G., 2022. "How do renewable energy and urbanization cause carbon emissions? Evidence from advanced panel estimation techniques," Renewable Energy, Elsevier, vol. 185(C), pages 996-1005.
    37. Chien, FengSheng & Chau, Ka Yin & Sadiq, Muhammad, 2023. "Impact of climate mitigation technology and natural resource management on climate change in China," Resources Policy, Elsevier, vol. 81(C).
    38. Tian, Jinfang & Yu, Longguang & Xue, Rui & Zhuang, Shan & Shan, Yuli, 2022. "Global low-carbon energy transition in the post-COVID-19 era," Applied Energy, Elsevier, vol. 307(C).
    39. Fakher, Hossein Ali & Ahmed, Zahoor & Acheampong, Alex O. & Nathaniel, Solomon Prince, 2023. "Renewable energy, nonrenewable energy, and environmental quality nexus: An investigation of the N-shaped Environmental Kuznets Curve based on six environmental indicators," Energy, Elsevier, vol. 263(PA).
    40. Lei, Xiying & Yang, Yao & Alharthi, Majed & Rasul, Farhat & Faraz Raza, Syed Muhammad, 2022. "Immense reliance on natural resources and environmental challenges in G-20 economies through the lens of COP-26 targets," Resources Policy, Elsevier, vol. 79(C).
    41. Wan, Qilong & Miao, Xiaodong & Afshan, Sahar, 2022. "Dynamic effects of natural resource abundance, green financing, and government environmental concerns toward the sustainable environment in China," Resources Policy, Elsevier, vol. 79(C).
    42. Dai, Jiapeng & Ahmed, Zahoor & Sinha, Avik & Pata, Ugur Korkut & Alvarado, Rafael, 2023. "Sustainable green electricity, technological innovation, and ecological footprint: Does democratic accountability moderate the nexus?," Utilities Policy, Elsevier, vol. 82(C).
    43. Xi Chen & Zhigang Chen, 2021. "Can Green Finance Development Reduce Carbon Emissions? Empirical Evidence from 30 Chinese Provinces," Sustainability, MDPI, vol. 13(21), pages 1-18, November.
    44. Liton Chandra Voumik & Shohel Md. Nafi & Festus Victor Bekun & Murat Ismet Haseki, 2023. "Modeling Energy, Education, Trade, and Tourism-Induced Environmental Kuznets Curve (EKC) Hypothesis: Evidence from the Middle East," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    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. Ye, Maoran & Tang, Ling & Huang, Lin & Li, Mei, 2023. "On conflict of natural resources-carbon emissions nexus in China: The role of economic policy uncertainty," Resources Policy, Elsevier, vol. 86(PB).
    2. Zhou, Bingjun & Huang, Yan & Gao, Ke & Luo, Chunyang, 2024. "How geopolitical risk and economic policy uncertainty impact coal, natural gas, and oil rent? Evidence from China," Resources Policy, Elsevier, vol. 88(C).
    3. Sun, Yizhong & Jin, Keyan & Wang, Deyong & Wu, Qingyang & Li, Zhezhou, 2023. "Revisiting the natural resources-financial development nexus in China: The importance of economic policy uncertainty," Resources Policy, Elsevier, vol. 86(PB).
    4. Ni, Xiewen, 2023. "Natural resources and COP26 targets of developed countries: Pandemic perspective of natural resources extraction," Resources Policy, Elsevier, vol. 83(C).
    5. Yang, Shubo & Jahanger, Atif & Hossain, Mohammad Razib, 2023. "Does China's low-carbon city pilot intervention limit electricity consumption? An analysis of industrial energy efficiency using time-varying DID model," Energy Economics, Elsevier, vol. 121(C).
    6. Balsalobre-Lorente, Daniel & Abbas, Jaffar & He, Chang & Pilař, Ladislav & Shah, Syed Ale Raza, 2023. "Tourism, urbanization and natural resources rents matter for environmental sustainability: The leading role of AI and ICT on sustainable development goals in the digital era," Resources Policy, Elsevier, vol. 82(C).
    7. Syed, Qasim Raza & Durani, Farah & Kisswani, Khalid M. & Alola, Andrew Adewale & Siddiqui, Aaliyah & Anwar, Ahsan, 2024. "Testing natural resource curse hypothesis amidst geopolitical risk: Global evidence using novel Fourier augmented ARDL approach," Resources Policy, Elsevier, vol. 88(C).
    8. Zhang, Jinjun & Abbasi, Kashif Raza & Hussain, Khadim & Akram, Sabahat & Alvarado, Rafael & Almulhim, Abdulaziz I., 2022. "Another perspective towards energy consumption factors in Pakistan: Fresh policy insights from novel methodological framework," Energy, Elsevier, vol. 249(C).
    9. Suki, Norazah Mohd & Suki, Norbayah Mohd & Afshan, Sahar & Sharif, Arshian & Meo, Muhammad Saeed, 2022. "The paradigms of technological innovation and renewables as a panacea for sustainable development: A pathway of going green," Renewable Energy, Elsevier, vol. 181(C), pages 1431-1439.
    10. Solangi, Yasir Ahmed & Jianguo, Du, 2023. "Examining challenges and solutions for environmental and natural resource management with a focus on mineral resources," Resources Policy, Elsevier, vol. 86(PA).
    11. Murshed, Muntasir & Ahmed, Rizwan & Khudoykulov, Khurshid & Kumpamool, Chamaiporn & Alrwashdeh, Nusiebeh Nahar Falah & Mahmood, Haider, 2023. "Can enhancing financial inclusivity lower climate risks by inhibiting carbon emissions? Contextual evidence from emerging economies," Research in International Business and Finance, Elsevier, vol. 65(C).
    12. Zhang, Shuyuan & Xie, Wenlan & Sun, Siying & Wu, Fan & Xue, Ying, 2024. "Nexus of green energy innovation, governance quality, and CO2 emissions in natural resource sector: The role of sustainable human development," Resources Policy, Elsevier, vol. 88(C).
    13. Li, Songran & Shao, Qinglong, 2022. "Greening the finance for climate mitigation: An ARDL–ECM approach," Renewable Energy, Elsevier, vol. 199(C), pages 1469-1481.
    14. Habiba, Umme & Xinbang, Cao & Anwar, Ahsan, 2022. "Do green technology innovations, financial development, and renewable energy use help to curb carbon emissions?," Renewable Energy, Elsevier, vol. 193(C), pages 1082-1093.
    15. Safi, Adnan & Haseeb, Muhammad & Islam, Madeeha & Umar, Muhammad, 2023. "Can sustainable resource management overcome geopolitical risk?," Resources Policy, Elsevier, vol. 87(PB).
    16. Hossain, Mohammad Razib & Singh, Sanjeet & Sharma, Gagan Deep & Apostu, Simona-Andreea & Bansal, Pooja, 2023. "Overcoming the shock of energy depletion for energy policy? Tracing the missing link between energy depletion, renewable energy development and decarbonization in the USA," Energy Policy, Elsevier, vol. 174(C).
    17. Zhenxiang Cao & Liqing Peng, 2023. "The Impact of Digital Economics on Environmental Quality: A System Dynamics Approach," SAGE Open, , vol. 13(4), pages 21582440231, December.
    18. Wenjuan, Zhu & Zhong, Kaiyang & He, Mingqiang & Pham, Thanh Huong & Nguyen, Quang Khai & Huy, Pham Quang, 2023. "Volatility challenges for natural resources during COVID-19 and its impact on economic development for sustainable economic repossession," Resources Policy, Elsevier, vol. 86(PB).
    19. Jin, Yinshi & Zhou, Bingjun & Zhang, Panpan & Li, Tiancai, 2024. "How education expenditures, natural resources, and GDP interact with load capacity factor in the presence of trade diversity index under COVID-19 perception: Evidence from G-7 nations," Resources Policy, Elsevier, vol. 88(C).
    20. Nusrat Farzana & Md Qamruzzaman & Yeasmin Islam & Piana Monsur Mindia, 2023. "Nexus between Personal Remittances, Financial Deepening, Urbanization, and Renewable Energy Consumption in Selected Southeast Asian Countries: Evidence from Linear and Nonlinear Assessment," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 270-287, November.

    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:jrpoli:v:88:y:2024:i:c:s0301420723011352. 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.elsevier.com/locate/inca/30467 .

    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.