THE ROLE OF GREEN FINANCE AND RENEWABLE ENERGY FOR SUSTAINABLE DEVELOPMENT IN BRICS COUNTRY

Authors

Fachrial Djannah Rosadi Universitas Pembangunan Panca Budi
Nasution Lia Nazliana Universitas Pembangunan Panca Budi
Rusiadi Rusiadi Universitas Pembangunan Panca Budi

DOI:

Keywords:

Sustainable Development, Green Finance, Renewable Energy Consumption, Green Growth

Abstract

The acceleration of economic development in BRICS countries over the past decade has created significant pressure on the environment, exacerbating the global climate crisis and threatening the sustainability of international development. A strategic balance between socioeconomic growth and environmental sustainability is needed, which remains a major challenge. This study analyzes the impact of green finance, green growth, renewable energy consumption, emission gases, green resource investment, and clean energy access on sustainable development, taking a sample period from 2000 to 2023. The ARDL panel is a suitable method used because this study uses several countries over a long period of time. This study found that emission gases have a significant effect in every BRICS country, but green finance only has a significant effect in India and China. Overall, in the long term, all variables have a significant effect on sustainable development except for the clean energy access variable. In the short term, the variables of green finance, renewable energy consumption, green resource investment, and emission gases have a significant effect on sustainable development

References

Abbass, K., Qasim, M. Z., Song, H., Murshed, M., Mahmood, H., & Younis, I. (2022). A review of the global climate change impacts, adaptation, and sustainable mitigation measures. Environmental Science and Pollution Research, 29(28), 42539–42559. https://doi.org/10.1007/s11356-022-19718-6

Ambrósio, G., Da Cunha, D. A., Pires, M. V., Costa, L., Faria, R. M., & Gurgel, A. C. (2021). Human development, greenhouse gas emissions and sub-national mitigation burdens: a Brazilian perspective. Discover Sustainability, 2(1). https://doi.org/10.1007/s43621-021-00044-9

Asif, M., Riaz, H., Ahmed, M., & Saeed, A. (2022). Borsa _ Istanbul Review Does green finance really deliver what is expected ? An empirical perspective. Borsa Istanbul Review, 22(3), 586–593. https://doi.org/10.1016/j.bir.2021.07.006

Ding, X., Li, W., Huang, D., & Qin, X. (2022). Does Innovation Climate Help to Effectiveness of Green Finance Product R&D Team? The Mediating Role of Knowledge Sharing and Moderating Effect of Knowledge Heterogeneity. Sustainability (Switzerland), 14(7). https://doi.org/10.3390/su14073926

Franley Mngumi, & Li Huang, Geng Xiuli, B. A. (2024). Financial efficiency and CO2 emission in BRICS. Dose digital economy development matter? Heliyon, 10(2), 1–35. https://doi.org/10.1016/j.heliyon.2024.e24321

Fu, C., Lu, L., & Pirabi, M. (2024). Advancing green finance: a review of climate change and decarbonization. Digital Economy and Sustainable Development, 2(1), 1–23. https://doi.org/10.1007/s44265-023-00026-x

Guo, X., Yang, J., Shen, Y., & Zhang, X. (2024). Impact on green finance and environmental regulation on carbon emissions: evidence from China. Frontiers in Environmental Science, 12(February), 1–18. https://doi.org/10.3389/fenvs.2024.1307313

Gwani, A. A., & Sek, S. K. (2024). Gis-Based Trend Analysis on Renewal Energy Consumption and Production in Africa. Journal of Quality Measurement and Analysis, 20(2), 181–196. https://doi.org/10.17576/jqma.2002.2024.13

Harin Tiawon, M. (2023). The Role of Renewable Energy Production, Energy Efficiency and Green Finance in Achieving Sustainable Economic Development: Evidence from Indonesia. International Journal of Energy Economics and Policy, 13(1), 251–260. https://doi.org/10.32479/ijeep.13915

Holden, E., Linnerud, K., & Bøe, V. (2025). Sustainable development: Notions, numbers, and narratives. Sustainable Development, 33(2), 2812–2825. https://doi.org/10.1002/sd.3261

Jawadi, F., Pondie, T. M., & Cheffou, A. I. (2025). New challenges for green finance and sustainable industrialization in developing countries: A panel data analysis. Energy Economics, 142(December 2024), 108120. https://doi.org/10.1016/j.eneco.2024.108120

Larissa Basso, E. V. (2022). Are the BRICS Engaged in the Low Carbon Transition? CEBRI-Journal, 4, 123–151.

Li, Y., Liu, J., & Li, Y. (2024). Exploring the impact of renewable energy, green taxes and trade openness on carbon neutrality: New insights from BRICS countries. Heliyon, 10(18), e36984. https://doi.org/10.1016/j.heliyon.2024.e36984

Nasution, L. N., Sari, W. I., & Lubis, A. B. (2021). Kebijakan moneter dan pengaruhnya terhadap tingkat kemiskinan di lima negara asean. Jurnal Kajian Ekonomi Dan Kebijakan Publik, 6(2), 1–8. https://journal.pancabudi.ac.id/index.php/jepa/article/view/3851/3610

Norton, B. (2024). BRICS expands with new partner countries. Now it’s half of world population, 41% of global economy. In Geopolitical Economy. https://geopoliticaleconomy.com/2024/12/25/brics-expands-9-partner-countries-population-economy/

Okafor, A., Adusei, M., & Edo, O. C. (2024). Effects of the utilization of green bonds proceeds on green bond premium. Journal of Cleaner Production, 469(September), 1–7. https://doi.org/10.1016/j.jclepro.2024.143131

Patel, S., & Desai, R. (2024). Determinants of Sustainability Reporting Through the Lens of Green Loans Disclosure: Evidence From the Indian Banking Sector. NMIMS Management Review, 32(4), 265–276. https://doi.org/10.1177/09711023241311350

Peprah, J. A., Oteng, C., Karakara, A. A. W., Sebu, J., & Atobrah, E. (2024). Financing green growth in African emerging economies: Opportunities and challenges. Researchgate.Net, September. https://doi.org/10.13140/RG.2.2.22346.38080

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616

Qin, M., Zhang, X., Li, Y., & Badarcea, R. M. (2023). Blockchain market and green finance: The enablers of carbon neutrality in China. Energy Economics, 118(February), 1–7. https://doi.org/10.1016/j.eneco.2022.106501

Rusiadi, E. (2023). Metode Penelitian Kuantitatif Bidang Ekonomi Moneter. In Penerbit Tahta Media. http://tahtamedia.co.id/index.php/issj/article/view/453%0Ahttps://tahtamedia.co.id/index.php/issj/article/download/453/451

Rusiadi, R., Ade Novalina, Bhaktiar Effendi, & Anita N Hutasoit. (2022). Ardl Panel Model of International Financial System and Monetary Policy of Asia Pasiific Economic Cooperation. Proceeding of The International Conference on Economics and Business, 1(1), 83–92. https://doi.org/10.55606/iceb.v1i2.185

Sahoo, M., Bhujabal, P., Gupta, M., & Islam, M. K. (2024). Empowering BRICS economies: The crucial role of green finance, information and communication technology and innovation in sustainable development. Sustainable Development, 32(6), 7292–7308. https://doi.org/10.1002/sd.3083

Siller, T., & Johnson, G. (2025). We Want a Sustainable Society not Sustainable Development. 29–46. https://doi.org/10.1007/978-3-031-85032-5_4

Su, W., Wang, Y., Streimikiene, D., Balezentis, T., & Zhang, C. (2020). Carbon dioxide emission decomposition along the gradient of economic development: The case of energy sustainability in the G7 and Brazil, Russia, India, China and South Africa. Sustainable Development, 28(4), 657–669. https://doi.org/10.1002/sd.2016

Tripathi, A., & Singh, M. P. (2016). Determinants of sustainable / green consumption : a review Avinash Tripathi * Manvendra Pratap Singh. Int. J. Environmental Technology and Management, 19(3/4), 316–358.

Udeagha, M. C., & Ngepah, N. (2023). The drivers of environmental sustainability in BRICS economies: Do green finance and fintech matter? World Development Sustainability, 3(December 2022), 100096. https://doi.org/10.1016/j.wds.2023.100096

Wang, Y., Cui, L., & Zhou, J. (2025). The impact of green finance and digital economy on regional carbon emission reduction. International Review of Economics and Finance, 97, 1–17. https://doi.org/10.1016/j.iref.2024.103748

Waqas, M., Farooq, F., Bhat, M. A., Sibt-e-Ali, M., & Batool, K. (2025). Crafting a Sustainable Environment through Green Energy, Financial Development and Agriculture in the BRICS Economies. Journal of the Knowledge Economy 2025, 1–38. https://link.springer.com/article/10.1007/s13132-025-02694-w

Wu, G., Liu, X., & Cai, Y. (2024). The impact of green finance on carbon emission efficiency. Heliyon, 10(1), 1–6. https://doi.org/10.1016/j.heliyon.2023.e23803

Xiao, L., & Zhang, Y. (2025). Research on the impact of free trade pilot zones on pollution reduction and carbon reduction. World Regional Studies, 34(2), 98–113. https://doi.org/10.3969/j.issn.1004-9479.2025.02.20230885

Xue, Y., Ma, T., Zhuang, T., & Ma, Y. (2023). The development of green finance under the goal of carbon neutrality: A review from China’s perspective. Frontiers in Earth Science, 11, 1–30. https://doi.org/10.3389/feart.2023.1123020

Yadav, A., Gyamfi, B. A., Asongu, S. A., & Behera, D. K. (2024). The role of green finance and governance effectiveness in the impact of renewable energy investment on CO2 emissions in BRICS economies. Journal of Environmental Management, 358(April), 120906. https://doi.org/10.1016/j.jenvman.2024.120906

Yang, X., Zhu, L., & Wei, T. (2024). The effect of green credit policy on carbon emissions based on China’s provincial panel data. Scientific Reports, 14(1), 1–15. https://doi.org/10.1038/s41598-024-73942-3

Yao, S., Li, T., & Li, Y. (2023). Promoting sustainable fossil fuels resources in BRICS countries: Evaluating green policies and driving renewable energy development. Resources Policy, 85(August), 1–9. https://doi.org/10.1016/j.resourpol.2023.103990

Zhang, D., Wang, J., Lin, Y., Si, Y., Huang, C., Yang, J., Huang, B., & Li, W. (2017). Present situation and future prospect of renewable energy in China. Renewable and Sustainable Energy Reviews, 76(September), 865–871. https://doi.org/10.1016/j.rser.2017.03.023

Zhou, M., & Li, X. (2022). Influence of green finance and renewable energy resources over the sustainable development goal of clean energy in China. Resources Policy, 78(September), 1–11. https://doi.org/10.1016/j.resourpol.2022.102816

Zsuzsanna Novák, Gábor Fáth, Chenhe Ge, P. K. (2024). INCLUSIVE GREEN FINANCE – As an Approach of Developing a Comprehensive Indicator for BRICS. Journal of Economic Structures, 14, 32–32. https://doi.org/10.62422/978-81-968539-6-9-011