Green Finance and Its Impact on Carbon Neutrality in ASEAN with Renewable Energy and Technological Innovation

C. T. Vidya

Chapter 1 in Green Finance and Energy Transition in ASEAN, 2026, pp 3-28 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter analyzes the role of green finance, renewable energy adoption, and technological innovation in achieving carbon neutrality in ASEAN economies. I use panel data from 2000 to 2022 and a fixed effects model with Driscoll–Kraay standard errors. The study found that green bonds play a crucial role in accelerating renewable energy transitions and mitigating carbon emissions. Additionally, technological innovation and clean energy adoption played a key role in reducing carbon emissions, while trade openness was found to be insignificant and requires appropriate regulations and technology transfers to have a meaningful impact. The study underscores the need for targeted policies, including carbon pricing, regulatory reforms, and cross-border collaborations, to align economic growth with sustainability goals. Therefore, a comprehensive framework integrating finance, technology, and policy measures is required to attain carbon neutrality in the region.

Keywords: Green Finance; Energy Transition; ASEAN; Carbon Neutrality; Renewable Energy; Sustainable Finance; Climate Finance; Energy Policy; Green Bonds; Net-Zero; Transition Finance; Clean Energy Investment; Sustainable Development; Decarbonization; Climate Change Mitigation; ESG (Environmental; Social; and Governance); Low-Carbon Economy; Energy Markets; Financial Mechanisms for Sustainability; Energy Efficiency; Foreign Direct Investment (FDI) in Energy; Carbon Pricing; Policy and Regulation; Just Transition; Green Sukuk; Sustainable Infrastructure; Public-Private Partnerships (PPP); Institutional Investors in Clean Energy; Green Investment Strategies; Financing Renewable Energy; Southeast Asia Energy Policy; China Energy Investment; ASEAN Climate Goals; Energy Security in ASEAN; COP28 and Energy Transition; COP29; Economic Growth and Green Energy; Sustainable Power Systems; Carbon Markets in Asia; Green Hydrogen in ASEAN; Electrification and Smart Grids (search for similar items in EconPapers)
JEL-codes: G23 O13 Q01 Q40 Q50 Q56 (search for similar items in EconPapers)
Date: 2026
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