Greening the Path to Carbon Neutrality: The Role of Technical Factors in Reducing Carbon Emissions in South Asia Post‐COP 28

Muhammad Asif, Nabila Amin, Muhammad Salman Shabbir and Huaming Song

Sustainable Development, 2025, vol. 33, issue S1, 1018-1037

Abstract: The rapid industrialization and economic growth of South Asia have improved living standards but also exacerbated CO2 emissions, intensifying the region's climate vulnerabilities. While existing literature has extensively examined green growth strategies in developed economies, few studies explore how green technological innovation, finance, and trade policies interact to shape emissions in South Asia, a region with distinct developmental challenges and high climate risks. This study investigates whether green energy adoption, technological innovation, and sustainable investments can decouple economic growth from emissions in South Asian economies from 1995 to 2022. Using second‐generation panel econometrics—accounting for cross‐sectional dependence and slope heterogeneity—along with AMG and CCEMG estimators, we assess long‐term relationships, supplemented by causal analysis, CuP‐FM and CuP‐BC for robustness. The results demonstrate that green technological innovation, green energy, and green finance significantly reduce CO2 emissions, while trade liberalization increases them, likely due to carbon‐intensive export structures and weak environmental regulations, a critical finding for regional policymaking. Furthermore, green investment mitigates emissions but requires stronger institutional support to align with COP28 mandates and SDGs (7, 9, 11–13). This study contributes to the literature by addressing the gap in South Asia–specific green growth analyses, integrating COP28 resolutions into empirical policy recommendations, and demonstrating the underutilized potential of green finance and innovation in achieving carbon neutrality. The findings urge policymakers to prioritize sustainable infrastructure, reform trade policies to reduce emissions leakage, and scale targeted green investments to reconcile economic and environmental goals.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:wly:sustdv:v:33:y:2025:i:s1:p:1018-1037

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