Green Finance: A Pathway to Achieving Carbon Neutrality and Sustainable Development

ABSTRACT Considering the significance of green economy and green finance to minimize carbon emissions and economic policy uncertainty, this study attempts to measure the impacts of green energy and climate solutions, green economy, green energy technology, and green finance on carbon emissions and sustainable development in the USA. Based on the data from January 3, 2020 to August 1, 2023, it utilizes QVAR and TVP‐VAR novel estimation techniques. Results report a high shock‐receiving tendency between eco‐friendly finance and markets, which further attract more investment during turbulent times and under different quantiles. Additionally, in terms of mitigating market risk and carbon emissions, green finance carbon credit is more useful and relatively better compared to other eco‐friendly indices. Despite economic policy uncertainty and volatile CO 2 emissions, investors and stakeholders are showing a positive attitude and confidence toward green economy, green finance, and energy innovations. In line with policy implications, the development of the green bond market, carbon tax policy, green economic recovery practices, green bond issuance network (GBIN) and digital green bond market are suggested.