DECARBONIZING PAKISTAN: THE INFLUENCE OF GREEN FINANCE ON RENEWABLE ENERGY AND ENVIRONMENTAL SUSTAINABILITY

Abstract

This study aims at assessing the impact of green finance and renewable energy in enhancing environmental sustainability in Pakistan. It examines the link between financial investment, policies and renewable energy and the challenges that hinder their efficiency. The sample includes Pakistan, and data is collected on a large set of variables from 2013 to 2022, with varying availability across indicators. In this context, green finance is assigned by investments of renewable energy, energy efficiency and green bonds, while the environmental sustainability is defined with energy transition and lower pollution levels. Having determined that green finance policies are used to tackle environmental degradation, this paper employs regression analysis. Thus, it can be concluded that despite the fact that green finance, and specifically investments in renewable energy have a number of beneficial environmental impacts, these have various limitations that are financial, political, infrastructural, and regulatory in nature. These findings suggest that financial and monetary incentives, coupled with technological improvement, and institutional changes should form the core of the policy interventions designed for Pakistan’s climate changes and green economy.

Keywords: Green Finance, Renewable Energy, Environmental Sustainability, Pakistan, Carbon Emission, Climate Change