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Do energy transition investment flows aid climate commitments?

Kwamie Dunbar and Daniel N. Treku

Energy Economics, 2025, vol. 142, issue C

Abstract: The transition to renewable energy is critical in meeting global climate commitments, particularly those outlined in the Paris Agreement and the United Nations Sustainable Development Goals. This study examines the influence of energy transition investment (ETI) flows on the issuance of green bonds in the green finance market. Green bonds fund sustainable projects and align investments with environmental goals. Our research reveals a positive correlation between ETI flows and the volume of green bonds issued, indicating that increased investments in energy transitions spur the growth of green bond markets. This relationship underscores the significance of impact investments in advancing the green finance market and supporting climate-resilience initiatives. Our findings suggest that fostering ETI flows can significantly enhance green bond issuances, thereby promoting sustainable development. Policymakers should consider these insights when designing effective strategies to incentivize impact investments, which are pivotal in achieving long-term environmental and economic sustainability.

Keywords: Green bonds; Renewable energy; Sustainable development; Energy transition (search for similar items in EconPapers)
JEL-codes: F32 F41 G15 H63 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988324008727

DOI: 10.1016/j.eneco.2024.108163

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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