Advancing green finance: a review of climate change and decarbonization

Abstract This paper comprehensively reviews the interconnections between climate change, decarbonization, and green finance. The urgency of addressing climate change and its catastrophic consequences needs to focus on green finance as a vital tool in the global struggle against environmental damage. Green finance involves supplying investments, loans, or capital to support environmentally friendly activities, facilitating the transition to a more sustainable future. This review explores the theoretical frame of reference for green finance, including its impacts on climate change, decarbonization of economies, carbon-stranded assets, risk management, renewable energy, and sustainable economic growth. Additionally, it examines regional focuses in Asia, such as the importance of green finance in China and the beliefs and challenges of green finance in Bangladesh. The review also discusses future directions and recommendations for advancing green finance. The review examines the current research in green finance and how it can address environmental challenges and promote sustainable development. More research needs to be conducted in mainstream economics and finance journals to bridge the knowledge gap and foster broader scholarly engagement in green finance. Researchers, policymakers, investors, and stakeholders will receive help from the study's reliable and robust insights into combating climate change and promoting sustainable development.