Green Finance and Low-Carbon Development: Examining the Mediating Role of Renewable Energy Consumption

Abstract

This study examines the relationship between green finance and low-carbon development, with particular emphasis on the mediating role of renewable energy consumption across six selected Asian countries: China, India, Pakistan, Bangladesh, Malaysia, and Indonesia. A quantitative research design based on secondary country-level panel data was specified for 2018–2022, comprising 30 potential country-year observations, subject to data availability. Renewable energy consumption data were sourced from the World Bank’s World Development Indicators, while carbon dioxide (CO₂) emissions per capita were used as an inverse proxy for low-carbon development. A consistent country-level indicator of green finance must be identified from a suitable financial database before the final empirical analysis. The proposed analysis includes descriptive statistics, correlation analysis, panel regression, and mediation analysis. In a provisional numerical illustration, green finance was associated with lower CO₂ emissions per capita (β = −0.385, p = 0.012) and higher renewable energy consumption (β = 0.620, p = 0.002), while renewable energy consumption was associated with lower CO₂ emissions (β = −0.135, p = 0.004). The illustrative indirect association through renewable energy consumption was −0.084, with a 95% confidence interval from −0.151 to −0.028. These numerical values are simulated and have not been calculated from the actual dataset; therefore, they should not be interpreted as confirmed empirical findings. The study is significant because it examines how sustainable financial activities may support cleaner energy systems and low-carbon economic development. It also highlights the potential role of renewable energy consumption in connecting green finance with environmental outcomes. The findings may offer useful insights for policymakers, financial institutions, and environmental planners seeking to encourage sustainable investment, expand renewable energy use, and reduce carbon emissions across Asian economies. The final conclusions will depend on verified data, the selection of a consistent green finance indicator, and the completed econometric analysis.