Assessing the Role of the Green Finance Index in Environmental Pollution Reduction

Abstract

A substantial amount of green finance is required for the transition to green energy, in order to control global warming. We used a common weight DEA composite indicator to develop a green finance index to measure the combined effects of energy, environment, and financial variables. The resulting green finance index values range from 0.98 to 0.71. According to results, Iceland and Nepal both have a score of 1.00, while Australia is third with 0.98 and Malta the lowest value of 0.71. The UK has a score of 0.23 and India has a score of 0.15.  The findings of this study offer an understanding of the role of green finance in environmental pollution reduction. We suggest several policy implications or solutions for governments, institutions, industries and the public to work towards environmental pollution reduction.A substantial amount of green finance is required for the transition to green energy, in order to control global warming. We used a common weight DEA composite indicator to develop a green finance index to measure the combined effects of energy, environment, and financial variables. The resulting green finance index values range from 0.98 to 0.71. According to results, Iceland and Nepal both have a score of 1.00, while Australia is third with 0.98 and Malta the lowest value of 0.71. The UK has a score of 0.23 and India has a score of 0.15.  The findings of this study offer an understanding of the role of green finance in environmental pollution reduction. We suggest several policy implications or solutions for governments, institutions, industries and the public to work towards environmental pollution reduction.