MOBILIZING FINANCE FOR ENVIRONMENTAL QUALITY: IMPACTS OF RENEWABLE ENERGY FINANCING, PUBLIC FINANCE, AND EXTERNAL INFLOWS ON GREENHOUSE GAS EMISSIONS IN SUB-SAHARAN AFRICA

Abstract

The United Nations 2030 target for clean and affordable energy, intended to promote environmental sustainability, has triggered scholars and policymakers towards examining the drivers of a clean environment and the readiness of developing countries to achieve this goal. This study investigates the effect of green finance and public finance on environmental quality in Sub-Saharan Africa. This area remains underexplored energy literature. Green finance is measured as international financial flow for clean and renewable energy, public finance is measured by general government consumption as a percentage of GDP. The study also examines the effect of ODA and remittances. Utilizing dataset from 2014 to 2023, the study applied Method of Moments Quantile Regression to classify the countries according to their emission levels. The results show that green financing and public finance exert a statistically significant positive effect on carbon emission intensity in medium- and high-emitting countries, while their effects are insignificant in low-emitting countries. Remittances also hinder green environment, while ODA significantly support green environment. The study recommends increased ODA inflows and investment of green finance, public finance, and remittances in green technologies, environmental research and development, and policy implementations to turn the inflows into drivers of sustainable environmental improvement.