Role of Green Investment on Economic Aspects of Sustainable Development

Abstract

Introduction: Investments in environmentally friendly initiatives can bolster infrastructure projects, agricultural methods, and water management systems that improve the ability to withstand climate-related difficulties. Green investments encompass endorsing carbon markets and financial instruments that incentivise reducing emissions. This research helps attain the climate objectives described in sustainable development goal 13 (SDG 13).

Purpose: This chapter aims to investigate the relationship between greenhouse gases (GHG) and gross domestic product (GDP), with the underlying objective of understanding the relevance of green investment for sustainable development.

Methodology: For the analysis, the top five countries: the USA, China, Germany, Japan, and India, were chosen based on the world’s largest economies in 2023, as per their GDP data. For testing the hypothesis, data from the World Bank database during the period 2002-2022 was retrieved and GDP is used as a dependent variable and GHG as an independent variable. For the study, panel data are used, and the Johansen cointegration test and ordinary least squares (OLS) regression are applied.

Findings: In the case of China and India, the null hypothesis has been rejected, which is depicted by the significant and high degree of relation between GHGs and the GDP of these two countries. The null hypothesis is also rejected for the USA and Germany, but it shows a significant and moderate degree of relationship between GHG and GDP. For Japan, the null hypothesis is accepted and reflects a negative relationship between GHG and GDP.

Citation

Kaur, R. and Tanwar, A. (2024), "Role of Green Investment on Economic Aspects of Sustainable Development", Taneja, S., Kumar, P., Reepu, Balusamy, B., Sood, K. and Grima, S. (Ed.) Sustainability Development through Green Economics (Contemporary Studies in Economic and Financial Analysis, Vol. 114), Emerald Publishing Limited, Leeds, pp. 91-106. https://doi.org/10.1108/S1569-375920240000114006