@article{66eef27b5c3041009944fac6961e1472,
title = "Financial roles in green investment based on the quantile connectedness",
abstract = "Green finance is critical to promoting carbon neutralisation and is an essential part of the carbon emission reduction policy framework. This paper applies quantile connectedness to analyze the overall situation and dynamic evolution of information spillover in the green and grey financial markets system and the financial roles in coordinating clean and traditional fossil fuels. The results show that fossil fuel is the primary source of risk in the information network, and their fluctuations have intensified the risk spillover effects in the system. The spillover level is more prominent in extreme cases, which means the information linkage in the system is integrated. The spillover effects of each variable fluctuate with time. In addition, green assets can be treated as a risk diversifier against fossil fuel investment shocks due to the weak connectedness in the average market. The risk infection path can provide a reference for governments to prevent the risk of infection in financial markets and guide the sustainability of the green investment.",
keywords = "Clean energy, Green finance, Green investment, Grey investment, Quantile connectedness",
author = "Xi Yuan and Meng Qin and Yifan Zhong and Moldovan Nicoleta-Claudia",
note = "Funding Information: The development of the green financial system should play the role of capital market, which can help the optimal configuration of resources. The financial industry plays a vital role in guiding green investment, which can be obtained through financial funding, and it can also be implemented by social capital, mainly through financial channels ( Zahan and Chuanmin, 2021 ). However, the financial funding supported by the governments is preferred to meet the relief demand during the crisis rather than large-scale green investment demand. Hence, social capital, especially credit has become the primary source of green project funds. The combination of energy transformation and financial development has enabled green finance to provide strong support for green energy projects ( Ili{\'c} et al., 2019 ). In addition to the support of green companies, the financing demands of the high-emissions industry are also worthy of attention. The energy industry, represented by thermal electricity, accounts for high total carbon emissions, and the power sector accounts for more than 40% of the total carbon emissions ( Liao et al., 2019 ). For energy safety, finance must support green, low-carbon transformation and cannot withdraw from traditional energy fields too quickly ( Tian et al., 2022 ). The difficulty of financing in the grey energy industry has caused the high cost of a green transition. It is necessary to guide the reduction replacement of traditional backward production to higher efficiency capacity, gradually achieving structural energy transformation. Taking the coal industry as an example, China continues to adjust the relevant policies of coal investment finance to respond to energy low carbon transformation requirements. In the “Green Industry Guidance Catalog (2019 Edition)”, coal cleaning production is included in the green industry. However, in the “Green Bond Support Project Directory (2021 Edition)”, coal cleaning is removed from the original green bond support project, and only the mine ecological environment recovery is retained. Hence, green finance also provides the required funds for traditional fossil energy companies, which is helpful to gradually guide the resource allocation and promote green low carbon transformation. Vigorous developments in green finance transformation will helpfully promote the green, low-carbon change of fossil energy enterprises ( Baker et al., 2018 ; Naeem et al., 2020 ). Green financial markets are staying in financial subsidies, and the market price of green assets can genuinely drive the transition speed. Publisher Copyright: {\textcopyright} 2022",
year = "2023",
month = jan,
doi = "10.1016/j.eneco.2022.106481",
language = "English",
volume = "117",
journal = "Energy Economics",
issn = "0140-9883",
publisher = "Elsevier",
}