A step forward on sustainability: The nexus of environmental responsibility- green technology- clean energy and green finance

Abstract

The literature lacks enough evidence on the nexus of green finance and clean energy although the terms 'green' and 'clean' have been eminent concepts in sustainable development. Therefore the fundamental objective of this study is to carry out the causal relationship among green finance clean energy environmental responsibility and green technology by applying the novel time-varying causality test (Shi et al. 2018 2020) on the daily data spanning from July 31 2014 to October 12 2021. The data follow persistent upward and downward movements, thus the application of a time-varying approach should be reliable and robust. The recursive evolving and rolling window algorithms show bidirectional causalities among green finance clean energy environmental responsibility and green technology but not for the entire period and with a special decrease and loss of significance in the COVID-19 period. In addition clean energy caused by green finance is less evident except in specific periods especially at the start of the pandemic. However higher volatility and significance of causality are observed for the entire period running from clean energy to green finance. Thus green finance investments are promoted and proportionated by the need for clean energy. This study exhibits the need to design a comprehensive policy for strengthening environmental responsibility and green finance through the funding of green technology to successful energy transition and sustainable development goals.