Green Finance, Renewable Energy Adoption, and
Carbon Emissions: Evidence from a Ten-Country Panel
Dataset (2010–2022)
Ihtisham ul Haq1,∗
1Department of Economics, The University of Haripur, Haripur, KP, Pakistan
Email: ihtisham@uoh.edu.pk
Abstract
The capital mobilisation needed to achieve the energy transition has put green finance on the
agenda of climate policy discussions, but it is empirically unclear whether financial flows
branded green translate into emissions abatement. Drawing on publicly available World Bank
World Development Indicators and Climate Policy Initiative data for ten major economies
over 2010–2022, this paper quantifies the relationships among green finance flows, renewable
energy share, and per-capita CO2 emissions using pooled ordinary least squares regression,
panel correlation analysis, and a cross-sectional multiple regression model. Renewable
energy share is a strong negative predictor of per-capita emissions (r = −0.661; p < 0.001;
βˆ = −0.1104), with each percentage-point increase in renewable penetration associated
with a reduction of approximately 0.11 metric tons of CO2 per capita. A three-variable
cross-sectional model combining renewable energy share, green finance, and GDP per capita
accounts for 61% of cross-country variance in emissions in 2022 (R2 = 0.613). There is a
positive and heterogeneous relationship between green finance flows and renewable adoption,
which is most notable when the financial commitment is combined with strong regulatory
frameworks. The country level trajectory analysis shows that all the ten economies have been
on the rise in their renewable share between 2010 and 2022, but at a rate varying between 0.37
and 2.88 percentage points annually, and that the institutional environment is a moderating
factor. The results have immediate implications on the design of green bond markets, the
lending policy of multilateral development banks, and the structures of additionality that
support net-zero transition schemes.
Keywords: Green finance; Renewable energy; CO2 emissions; Energy transition; Panel
data; World Development Indicators; Sustainable development