The Nexus Between Green Finance, Renewable Energy and Environmental Quality

Abstract

The aim of this study is to examine the impact of green finance on environmental quality. In this context, a panel of data covering 21 developing countries has been created. This data set includes carbon dioxide (CO2) emissions, green finance (GF), the share of renewable energy in total energy consumption (REN), per capita GDP (GNI) and international capital flows (FINANCE) to developing countries. The Panel Cantile Regression model was used to evaluate the relationship between the variables included in the analysis. The findings suggest that there is a long-term relationship between the variables. According to the cantile regression results, it has been observed that green finance has a negative impact on CO2 emissions, but this effect varies according to income levels. It has also been found that renewable energy improves environmental quality. © 2025 Elsevier Inc. All rights are reserved, including those for text and data mining, AI training, and similar technologies.