This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors retain the copyright without restrictions for their published content in this journal. HSSR is a SHERPA ROMEO Green Journal.
GREEN FINANCING AS A CONDITION FOR SUSTAINABLE ECONOMIC GROWTH
Corresponding Author(s) : Nadezhda Semenova
Humanities & Social Sciences Reviews,
Vol. 8 No. 5 (2020): September
Purpose of the study: The purpose of the study is to assess the current state of green financing in the Russian Federation and the extent of its impact on economic growth in the country.
Methodology: The main research methods utilized were the regression and cluster analysis and principal component analysis (PCA). Cluster analysis implies dividing the set of studied objects and features into groups or clusters that are homogeneous in some way. We used it to determine regional differentiation of subjects from the Russian Federation according to the level of green financing. The clustering of subjects was performed using the ward method. This method is aimed at combining closely located clusters. Regression analysis was used to build an econometric model for assessing the degree of influence of green Finance on economic growth.
Main Findings: The authors proved that stimulating green financing in Russia requires the following: creating a regulatory framework and roadmap for the development of green financing, active state participation in financing green projects, creating a “green bond market,” and a specialized banking institution.
Application of the study: In this article, the authors assessed the impact of green financing on Russia’s economic growth. As part of the study, the authors analyzed the dynamics of green financing in the Russian Federation from 2000–2018, developed an integrated indicator for sustainable economic growth based on three components of sustainable development (economic, social, and environmental), and estimated the impact of environmental investments on the integral indicator of sustainable economic growth.
Novelty/Originality of the study: The proposed methodology for calculating the integrated indicator of sustainable economic development allowed us to assess sustainable development, taking into account economic, social, and environmental indicators. Such an approach has several advantages over the current methods: it is universal, indicators are available, and calculations are clear.
Abid, N. M., Saeed, A. A., & Al-Beyaty, S. F. G. (2019). Trends in the physical and social urban form: Policy-making and natural sustainable development dialectics. Journal of Southwest Jiaotong University, 54(6). https://doi.org/10.35741/issn.0258-27188.8.131.52
Aglietta, M., Hourcade, J.-C., Jaeger, C., & Fabert, B. P. (2015). Financing transition in an adverse context: Climate finance beyond carbon finance. International Environmental Agreements: Politics, Law and Economics, 15(4), 403-420. https://doi.org/10.1007/s10784-015-9298-1
Al-Sheryan, K., & Nobanee, H. (2020). Green Finance: A mini-review. https://doi.org/10.2139/ssrn.3538696
Arnell, N., Lowe, J., Challinor, A., & Osborn, T. (2019). Global and regional impacts of climate change at different levels of global temperature increase. Climatic Change, 155(3), 377-391. https://doi.org/10.1007/s10584-019-02464-z
Arrhenius, S. (1896). On the influence of carbonic acid in the air upon the temperature of the ground. Philosophical Magazine and Journal of Science Series, 5(41), 237–276. https://doi.org/10.1080/14786449608620846
Avis, O. U. (2019). Foreign experience of bank financing of sustainable ecological, economic development and prospects of its utilization in Russia. Ekonomika. Nalogi. Pravo, 12(5), 121-131.
Balynskaya, N. R., Vasi’lyeva, A. G., Gafurova, V. M., Kuznetsova, N. V., & Rakhimova, L. M. (2017). Effective management of the financial sustainability of subjects of the Russian Federation as the factor of social and economic welfare of the modern territory: An empirical. The European Proceedings of Social & Behavioural Sciences, 985-992. https://doi.org/10.15405/epsbs.2017.07.02.127
Banga, J. (2019). The green bond market: A potential source of climate finance for developing countries. Journal of Sustainable Finance and Investment, 9(1), 17-32. https://doi.org/10.1080/20430795.2018.1498617
Bazhenov, I. N. (2018). Green financing: Global trends and Russian practice. National Strategy Issues, 5(50), 172–186. https://riss.ru/article/13610/
Bierman, F., Kanie, N., & Kim, R. E. (2017). Global governance by goal-setting: the novel approach of the UN sustainable development goals. Current Opinion in Environmental Sustainability, 26-27, 26-31. https://doi.org/10.1016/j.cosust.2017.01.010
Boev, P. A. (2017). The ecological footprint of the Russian regions. Key findings and recommendations. World Wide Fund for Nature (WWF) WWF Russia.
Bogacheva, O. V., & Smorodinov, O. V. (2017). Challenges to green Finance in G20 countries. World Economy and International Relations, 61(10), 16-24. https://doi.org/10.20542/0131-2227-2017-61-10-16-24
Borkova, E. A. (2020). Policy of stimulating green investment as a direction of regulation of the green finance market. Management Consulting, 5(137), 68-76. https://doi.org/10.22394/1726-1139-2020-5-68-76
Brundtland, G. H. (1987). Our common future: report of the World Commission on Environment and Development. Oxford University Press. https://sustainabledevelopment.un.org/content/documents/5987our-common-future.pdf
Cadman, T. (2014). Climate finance in an age of uncertainty. Journal of Sustainable Finance and Investment, 4(4), 351-356. https://doi.org/10.1080/20430795.2014.971097
Chien, N. V. (2020). Energy consumption, income, trading openness, and environmental pollution: Testing environmental Kuznets curve hypothesis. Journal of Southwest Jiaotong University, 55(1). https://doi.org/10.35741/issn.0258-27184.108.40.206
Criscuolo, C., & Menon, C. (2015). Environmental policies and risk finance in the green sector: cross-country evidence. Energy Policy, 83, 38-56. https://doi.org/10.1016/j.enpol.2015.03.023
Cui, Y., Geobey, S., Weber, O., & Lin, H. (2018). The impact of green lending on credit risk in China. Sustainability, 10(6), 1-16. https://doi.org/10.3390/su10062008
Demirel, P., Li, Q. C., Rentocchini, F., & Tamvada, J. P. (2019). Born to be green: New insights into the economics and management of green entrepreneurship. Small Business Economics, 52(4), 759-771. https://doi.org/10.1007/s11187-017-9933-z
D’Orazio, P., & Popoyan, L. (2019). Fostering green investments and tackling climate-related financial risks: Which role for macro-prudential policies? Ecological Economics, 160(C), 25-37. https://doi.org/10.1016/j.ecolecon.2019.01.029
Dvoretskaya, A. E. (2017). Green financing as a modern trend in the global economy. Academy Herald, 2, 60–65.
Eberling, R. (2017). Economic ideas: Jean-Baptiste Say and the “Law of Markets”. The Future of Freedom Foundation. https://www.fff.org/explore-freedom/article/economic-ideas-jean-baptiste-say-law-markets/
Ekelund, R., & Tollison, R. (1976). The new political economy of J. S. Mill: Means to social justice. The Canadian Journal of Economics, 9(2), 213-231. https://doi.org/10.2307/134519
Falcone, P. M., & Sica, E. (2019). Assessing the opportunities and challenges of green Finance in Italy: an analysis of the biomass production sector. Sustainability, 11, 517. https://doi.org/10.3390/su11020517
Fatoki, O. (2019). Green entrepreneurial orientation and firm performance in South Africa. Entrepreneurship and Sustainability Issues, 7(1), 247-262. https://doi.org/10.9770/jesi.2019.7.1(19)
Fedorenko, R. V., Persteneva, N. P., Konovalova, M. E., & Tokarev, Y. A. (2016). Research of the regional service market in terms of international economic activity’s customs registration. International Journal of Economics and Financial Issues, 6(S5), 136–144. https://econjournals.com/index.php/ijefi/article/view/2878
Fücks, R. (2013). Intelligent Wachsen. Hanser. https://doi.org/10.3139/9783446434981
Gil, S., & Sleszynski, J. (2003). An index of sustainable economic welfare for Poland. Sustainable Development, 11(1), 47-55. https://doi.org/10.1002/sd.203
Glazyrina, I. P., & Zabelina, I. A. (2018). Spatial heterogeneity of Russia in the light of the concept of a green economy: The social context. Geography and Natural Resources, 39(2), 103-110. https://doi.org/10.1134/S1875372818020026
Green Finance Study Group. (2017). G20 green finance synthesis report. http://unepinquiry.org/wp-content/uploads/2017/07/2017_GFSG_Synthesis_Report_EN.pdf
Halisçelik, E., & Soytas, M. (2019). Sustainable development from millennium 2015 to Sustainable Development Goals 2030. Sustainable Development, 27(4), 545-572. https://doi.org/10.1002/sd.1921
Kabir, L. S. (2019). State support of “green”investments and market “green” financing: foreign experience. Innovation and Expertise: Scientific Papers, 1(26), 97-108. https://doi.org/10.35264/1996-2274-2019-1-97-108
Karpova, O. P., & Obuvalov, V. D. (2020). Green financing as an element of environmental protection. Beneficiary, 71, 12–16.
Khudyakova, L. S. (2018). Reform of global Finance in the context of sustainable development. World Economy and International Relations, 62(7), 38-47. https://doi.org/10.20542/0131-2227-2018-62-7-38-47
Kissinger, G., Gupta, A., Mulder, I., & Unterstell, N. (2019). Climate financing needs in the land sector under the Paris Agreement: An assessment of developing country perspectives. Land Use Policy, 83, 256-269. https://doi.org/10.1016/j.landusepol.2019.02.007
Lafferty, W. (1996). The politics of sustainable development: global norms for national implementation. Environmental Politics, 2(5), 56-62. https://doi.org/10.1080/09644019608414261
Lavrinenko, O., Ignatjeva, S., Ohotina, A., Rybalkin, O., & Lazdans, D. (2019). The role of green economy in sustainable development (Case study: The EU States). Entrepreneurship and Sustainability Issues, 6(3), 1013-1026. https://doi.org/10.9770/jesi.2019.6.3(4)
Luukkanen, J., Kaivo-oja, J., Vähäkari, N., O'Mahony, T., Korkeakoski, M., Panula-Ontto, J., Vehmas, J., & Quoc, A. N. (2019). Resource efficiency and green economic sustainability transition evaluation of green growth productivity gap and governance challenges in Cambodia. Sustainable Development, 27(3), 312-320. https://doi.org/10.1002/sd.1902
Maiti, D., & Awasthi, A. (2020). ICT exposure and the level of wellbeing and progress: A cross country analysis. Social Indicators Research, 147, 311-343. https://doi.org/10.1007/s11205-019-02153-5
Malhotra, G., & Thakur, K. S. (2020). Evolution of green Finance: A bibliometric approach. Gedrag & Organisatie Review, 33(2), 583-594. https://doi.org/10.37896/GOR33.02/067
Marx, K. (1887). Capital: A critical analysis of capitalist production. Swan Sonnenschein, Lowrey, & Co.
Miroshnichenko, O. S., & Mostovaya, N. A. (2019). Green loan as a tool for green financing. Finance: Theory and Practice, 23(2), 31-43. https://doi.org/10.26794/2587-5671-2019-23-2-31-43
Nordhaus, W. D. (1977). Economic growth and climate: The case of carbon dioxide. American Economic Review, 67(1), 341–346.
Organization for Economic Co-operation and Development. (2011). Towards green growth. http://www.oecd.org/env/towards-green-growth 9789264111318-en.htm
Owen, R., Brennan, G., & Lyon, F. (2018). Enabling investment for the transition to a low carbon economy: government policy to finance early-stage green innovation. Current Opinion in Environmental Sustainability, 31, 137-145. https://doi.org/10.1016/j.cosust.2018.03.004
Pan, W. L., Pan, W., Liu, S., Tsai, S. B., Hu, C., & Tu, H. (2019). China’s provincial energy-related carbon emissions-economy nexus: A two-stage framework based on decoupling analysis and panel vector autoregression. Energy Science & Engineering, 7(4), 1201-1213. https://doi.org/10.1002/ese3.340
Pearce, D., Markandya, A., & Barbier, E. R. (1989). Blueprint for a green economy. Earthscan Publications Ltd. https://doi.org/10.4324/9780203097298
Pestel, E. (1989). Beyond the limits to growth: a report to the Club of Rome. Universe Books.
Porfiryev, B. N. (2016). Green trends in the global financial system. World Economy and International Relations, 60(9), 5-16. https://doi.org/10.20542/0131-2227-2016-60-9-5-16
Raberto, M., Ozel, B., Ponta, L., Teglio, A., & Cincotti, S. (2019). From financial instability to green Finance: the role of banking and credit market regulation in the Eurace model. Journal of Evolutionary Economics, 29(1, 2), 429-465. https://doi.org/10.1007/s00191-018-0568-2
Rubtsov, B. B., Guseva, I. A., Il’inskii, A. I., Lukashenko, I. V., Panova, S. A., Sadretdinova, A. F., & Alykova, S. M. (2018). “Green finance” in the world and in Russia. RuScience.
Ruffin, R. J. (2002). David Ricardo's discovery of comparative advantage. History of Political Economy, 34(4), 727-748. https://doi.org/10.1215/00182702-34-4-727
Sahin, C. (2020). A contemporary approach congenial to the environmentalism: Green Finance. Balkan and Near Eastern Journal of Social Sciences, 6(3), 55–58. http://ibaness.org/bnejss/2020_06_03/08_Sahin.pdf
Sedash, T. N., Tyutyukina, E. B., & Lobanov, I. N. (2019). Directions and instruments of “green projects” financing within the concept of sustainable development of the economy. Economics, Taxes & Law, 12(5), 52-60. https://doi.org/10.26794/1999-849X-2019-12-5-52-60
Selishcheva, T. A. (2018). “Green” economy as a model of sustainable development of the EEU countries. Problems of Modern Economy, 3(67), 6–12. http://www.m-economy.ru/art_e.php?nArtId=6393
Semin, A. N., Ponkratov, V. V., Levchenko, K. G., Pozdnyaev, A. S., Kuznetsov, N. V., & Lenkova, O.V. (2019). Optimization model for the Russian electric power generation structure to reduce energy intensity of the economy. International Journal of Energy Economics and Policy, 9(3), 379-387. https://doi.org/10.32479/ijeep.7552
Soundarrajan, P., & Vivek, N. (2016). Green Finance for sustainable green economic growth in India. Agricultural Economics (Czech Republic), 62(1), 35-44. https://doi.org/10.17221/ 174/2014-AGRICECON
Wang, Y. (2013). Research in green credit policy and development summary. Times Finance, 7, 224–225.
Yatim, P., Ngan, L., & Lam, H. L. (2017). Financing green growth in Malaysia: enabling conditions and challenges. Chemical Engineering Transactions, 61, 1579-1584.
Zhang, D., Zhang, Z., & Managi, S. (2019). A bibliometric analysis of green Finance: Current status, development, and future directions. Finance Research Letters, 29, 425-430. https://doi.org/10.1016/j.frl.2019.02.003
Zimmerman, R., Brenner, R., & Abella, J. L. (2019). Green infrastructure financing as an imperative to achieve green goals. Climate, 7(3), 39-52. https://doi.org/10.3390/cli7030039