ABSTRACT Due to climate change and government economic pressures, understanding Public Green Finance (PGF) factors is vital. Despite worldwide sustainability promises, less is known about how technological, economic, and policy factors drive public green investments, especially in industrialized economies. We fill that gap by empirically evaluating the primary determinants of PGF in the G7 countries, where innovative capacity and environmental policy frameworks drive low‐carbon growth. The article under investigation examines the determinants of PGF over the period 1995–2022 in G7 countries that refer to the roles of the important variables: Environmental Technology (ET), Energy Efficiency (EE), Environmental Policy Stringency (EPS), Economic Development (ED), Trade (TR), Domestic Energy‐Related Uncertainty (DEUI), Human Capital (HC), Domestic Economic Policy Uncertainty (DEPU), and Public Green Finance (PGF). To adopt the best econometric methods, such as Panel Two‐Stage least Squares (2SLS) and Driscoll–Kraay Fixed Effects regression, this study involves the endogeneity, autocorrelation, and heteroskedasticity to derive strong and dependable findings. The results show that higher EPS, ED, and TR have a large positive impact on PGF, whereas higher EE and DEUI have negative links with PGF. Furthermore, HC is pointed out as being a significant element that can be used in improving the efficacy of the PGF initiatives. The paper also shows the subtle effects of DEPU that may either lead to encouragement or discouragement of green investments based on the setting. The outcomes of these studies can be useful in informing policymakers, financial intermediaries, and stakeholders in G7 nations, which is part of a larger agenda of promoting sustainable development and mitigating the issue of climate change. This study also corresponds with the Sustainable Development Goals (SDG) established by the United Nations, especially SDG 7, SDG 9, and SDG 13, which provide strategic value to positively mobilize green finance in the G7 countries.
Li et al. (Mon,) studied this question.