Vol: 14, Issue: 3 2024

Page: 36-44

The Role of Green Financing in Accelerating Sustainable Economic Development in Emerging Economies

Laasya Karumanchi

Received Date: 2024-05-09

Accepted Date: 2024-08-10

Published Date: 2024-08-18

http://doi.org/10.37648/ijtbm.v14i03.004

Nowadays, European countries, while implementing the goals of sustainable development, are trying to be energy secure by reducing energy consumption and switching to renewable energy sources; the issue of green bonds is essential in the financing of these projects. This study aims to investigate the current situation and trends in green finance, identifies its problems and challenges, as well as determines the importance of green bonds in sustainability in general and renewable energy supply in particular. Green financing has emerged as a pivotal mechanism in driving sustainable economic development, particularly in emerging economies that face dual challenges of economic growth and environmental preservation. This theoretical research explores the role of green financing in fostering sustainability through investments in renewable energy, energy efficiency, sustainable agriculture, and eco-friendly infrastructure. By analyzing the theoretical underpinnings of green financing mechanisms, such as green bonds, climate funds, and public-private partnerships, the study highlights their potential to mobilize capital for environmentally sustainable projects.

The research also examines the interplay between financial innovation and policy frameworks in promoting green finance. Challenges such as insufficient regulatory structures, limited financial literacy, and inadequate market incentives in emerging economies are discussed, alongside strategies to overcome these barriers. Emphasis is placed on the critical role of international cooperation, technology transfer, and capacity building in ensuring the effective implementation of green financing initiatives.

The findings underscore the transformative impact of green financing in aligning economic growth with the Sustainable Development Goals (SDGs) while addressing climate change and resource depletion. This study provides a comprehensive theoretical framework for policymakers, financial institutions, and development practitioners to design and implement effective green financing strategies, ultimately contributing to a sustainable global economy.

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