Climate change is no longer a challenge for a single nation but a responsibility for the global community. With the looming threat of the ""brown economy,"" sustainable development (SD) has become essential for economies worldwide. Green credit, which includes funding, lending, and other credit methods that account for environmental impact and conservation, plays a crucial role in promoting SD. By adopting green credit, banks can reduce risks associated with polluting industries while supporting sustainability goals. This study examines the relationship between green credit, including credit for agriculture, forestry, and fisheries, and international financial flows for renewable energy in Vietnam from 2012 to 2021. Using Quantile-on-Quantile Regression (QQR), we assess how green credit influences SD at various quantiles, providing a detailed understanding of its impact over time. The results show a positive relationship between international renewable energy support and SD at lower quantiles (0.05 to 0.55), which weakens at higher quantiles. Similarly, credit for agriculture is positively correlated with SD at quantiles 0.05 to 0.3, but this relationship diminishes at higher quantiles. Based on these findings, we recommend that Vietnamese authorities focus on improving capital efficiency and strengthening the oversight of renewable energy projects. Additionally, increasing CA in rural areas with lower SD levels will help promote sustainability in these regions.
Hải et al. (Wed,) studied this question.
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