Optimization of renewable energy supply for a carbon neutral society: Role of environmental regulations, sustainable finance, and financial innovation through the lens of game theory

• Published in: Geological journal (Chichester, England) Vol. 58; no. 9; pp. 3466 - 3475
• Main Author: Najam, Hina
• Format: Journal Article
• Language: English
• Published: Hoboken, USA John Wiley & Sons, Inc 01-09-2023
• Subjects: carbon neutrality; environmental regulation; financial innovation; renewable energy; sustainable finance
• ISSN: 0072-1050; 1099-1034
• DOI: 10.1002/gj.4746

Nations maximize green technologies and renewable energy to address climate change and reach sustainable development goals. As a result of the Paris Climate Agreement, several countries have made reducing or eliminating their carbon footprints a primary priority. Using a game theoretical perspective, this article analyses empirical data from 2011 to 2021 to determine the impact that renewable energy, environmental regulation, sustainable finance, and financial innovation will have on the ability to emerge from Asian nations in order to achieve a carbon‐neutral society. The cross‐section dependence, panel unit root, and augmented mean group tests confirmed the zero‐carbon environmental Kuznets curve hypothesis. As a result, it is observed that the availability of renewable energy, environmental regulations, sustainable finance, and financial innovation greatly cut carbon emissions and boosts national capabilities to reach the carbon neutrality target. The reduction of sectoral risks and carbon emissions, as well as achieving a sustainable and carbon‐neutral society. It would be facilitated by nations capitalizing on and reinforcing these variables and expanding investment in green recovery.
Nations are focusing on making the most of green technologies and renewable energy to address climate change and reach sustainable development goals. As a result of the Paris Climate Agreement (COP26), several countries have made reducing or eliminating their carbon footprints a primary priority. Using a game theoretic perspective, this article analyses empirical data from 2011 to 2021 to determine the impact that renewable energy (RE), environmental regulation (ER), sustainable finance (SF), and financial innovation (FI) will have on the ability of Asian emerging nations to achieve a carbon‐neutral society. The cross‐section dependence, panel unit root, and augmented mean group tests confirmed the zero‐carbon environmental Kuznets curve hypothesis. As a result, it is observed that the availability of RE, ER, SF, and FI greatly cuts carbon emissions and boosts national capabilities to reach the carbon neutrality target. The reduction of sectoral risks and carbon emissions, as well as achieving a sustainable and carbon‐neutral society. It would be facilitated by nations capitalising on and reinforcing these variables and expanding investment in green recovery.