How does green finance asymmetrically affect greenhouse gas emissions? Evidence from the top-ten green bond issuer countries

The present study analyzes the asymmetric association between green finance and greenhouse gas emissions in the top ten countries that support green finance (China, Canada, France, Germany, Japan, the Netherlands, Spain, Sweden, the UK, and the US). Previous research employed panel data methods, resulting in consistent outcomes concerning the association between green finance and environmental quality, regardless of the fact that many countries did not generate such a relationship individually. The present study, however, uses the quantile-on-quantile technique, which enables us to assess time-series dependence in each country independently. We find that green finance enhances environmental quality by curtailing greenhouse gas emissions in most of the economies studied at specific quantiles of the data. Moreover, the level of asymmetry among our variables changes by country, focusing on the need for policy makers to pay particular attention in implementing green finance and environmental sustainability policies.