The Granger-Causality between Green Finance and Environmental Sustainability: Evidence from G7 Countries

Year 2024, Volume: 5 Issue: 2, 50 - 56, 30.12.2024

Ferhat Çıtak , Safa Hoş

Abstract

Green finance plays a pivotal role in advancing sustainable development by channeling investments into renewable energy, sustainable agriculture, and energy-efficient technologies, thereby reducing greenhouse gas emissions and promoting resource conservation. This study investigates the causal relationship between green finance (GF) and environmental sustainability (ES) in G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) over the period 1990–2021. The results highlight a bidirectional causality between GF and ES in Germany and the USA, indicating mutual reinforcement between green finance and environmental sustainability. For Canada and Japan, the analysis identifies unidirectional causality from GF to ES, suggesting that green finance drives improvements in environmental sustainability. Conversely, no causal relationships are observed for France, Italy, and the UK, pointing to heterogeneity in the GF-ES nexus across nations.

Keywords

Green Finance, Environmental Sustainability, G7 Countries, VAR Model

Yeşil Finans ve Çevresel Sürdürülebilirlik Arasındaki Granger Nedenselliği: G7 Ülkelerinden Kanıtlar

Abstract

Yeşil finans, yenilenebilir enerji, sürdürülebilir tarım ve enerji verimliliği sağlayan teknolojilere yapılan yatırımları yönlendirerek sera gazı emisyonlarını azaltmada ve kaynak korumayı teşvik ederek sürdürülebilir kalkınmayı ilerletmede önemli bir rol oynamaktadır. Bu çalışma, G7 ülkelerinde (Kanada, Fransa, Almanya, İtalya, Japonya, Birleşik Krallık ve Amerika Birleşik Devletleri) 1990-2021 döneminde yeşil finans (GF) ile çevresel sürdürülebilirlik (ES) arasındaki nedensel ilişkiyi incelemektedir. Sonuçlar, Almanya ve ABD’de GF ile ES arasında çift yönlü bir nedensellik olduğunu, yani yeşil finans ve çevresel sürdürülebilirliğin birbirini karşılıklı olarak güçlendirdiğini göstermektedir. Kanada ve Japonya için yapılan analiz, GF’den ES’ye tek yönlü bir nedensellik olduğunu, yani yeşil finansın çevresel sürdürülebilirliği iyileştirdiğini ortaya koymaktadır. Buna karşılık, Fransa, İtalya ve Birleşik Krallık için GF-ES bağlantısında herhangi bir nedensel ilişki gözlenmemiştir; bu da ülkeler arasında bu ilişki açısından heterojenlik olduğunu göstermektedir.

Keywords

yeşil finans, çevresel sürdürülebilirlik, G7 ülkeleri, VAR modeli

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