Environmental outlook of ASEAN-5 through the lens of green bonds, environmental technologies and financialization

Abstract

Sustainable development goals call for urgent action with an aim to spur socio-economic growth along with the protection of the environment and resources. However, these goals are difficult to be achieved when finances are not mobilized to mitigate harmful resources. In return, numerous green bond manifestations appeared in the market, which are viewed as a bridge to have successful implementation of sustainable development goals. Therefore, the study is aimed to explore the relevance of green bonds, financialization, and sustainable environmental change mitigation technologies for environmental change in ASEAN economies. The initial outcomes confirm the long-run cointegration association between study variables and also explore the slope heterogeneity and cross-sectional dependencies. To explore the causal connections between the study variables, the current study employs CS-ARDL technique. The study finds significant contributions of sustainable environmental change mitigation technologies and green bonds in the reduction of pollution, hence improving climate quality. The short-run infers similar results with relatively lower magnitudes of coefficients as compared to the long-run. Negative error correction terms are used to confirm the stability of the model, which implies sustained convergence towards “steady-state equilibrium” in case of expected deviations. The results offer practical implications and recommendations.