Does Green Finance Affect Renewable Energy Development: Evidence from BRICS Countries

Abstract

The position of sustainable finance is specified in a conversation of clean energy and energy efficiency; it is tough to estimate its suggestions for the growth of inexhaustible energy. This study inspects the impact of green finance on renewable energy development in BRICS nations. The panel root test, panel cointegration test, and panel Granger causality test were used in this work to test the connection between carbon dioxide, green finance, growth of domestic products, renewable energy growth, and oil price. This study uses the conventional first-generation Pedroni and advanced Westerlund (2007) cointegration tests to check the model variables' cointegration relationship. Using the period 1996–2022, The overall results show the critical role of green finance in driving renewable energy development in BRICS nations. However, the findings also reveal significant challenges and opportunities that require tailored strategies. The study's findings provide compelling evidence of green finance's critical role in advancing renewable energy development in BRICS nations. However, the significant variability in results across countries calls for tailored, region-specific strategies. Consequently, to the best of the authors, this will be the best empirical study to explore the impact of green finance on renewable energy growth in BRICS nations.