Unveiling the Nexus: Carbon finance and climate technology advancements

Kwamie Dunbar, Johnson Owusu-Amoako and Daniel N. Treku

International Review of Financial Analysis, 2024, vol. 96, issue PA

Abstract: This study examines the dynamic connections between carbon finance mechanisms such as sustainable bonds and emissions trading systems and their role in advancing climate technology. It also explores direct and indirect contributions of carbon finance mechanisms to the progress of climate technology. It employs a causal mediation analysis and high-dimensional fixed-effects panel regression models to derive complex relationships governing carbon finance and climate technology. The findings highlight not only the direct influence of sustainable finance on climate technology but also the indirect pathways through which carbon finance contributes to technological advancements. The analysis demonstrates that sustainable bonds have a positive and direct influence on the advancement of climate technology, whereas a voluntary carbon market indirectly promotes climate-technology development by influencing the implementation of sustainable bonds.

Keywords: Climate technology; Sustainable bonds; Carbon market; Emissions trading systems (search for similar items in EconPapers)
JEL-codes: F32 F41 F62 G11 G12 G15 H63 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005908

DOI: 10.1016/j.irfa.2024.103658

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