From Innovation to Impact: How Green Finance and Innovation Drive Carbon Intensity Reduction in Europe

The research hypothesizes that green finance, when integrated with green innovation, significantly enhances the climate-mitigation effectiveness of technological advancements. The data includes variables such as carbon intensity, green technology adoption, and carbon pricing implementation, along with economic and industrial factors like GDP, foreign direct investment (FDI), and industrialization.

Notable findings reveal that while green innovation alone has a modest impact on carbon intensity, its effectiveness is significantly amplified when supported by green finance, specifically carbon pricing. Cross-country heterogeneity is also evident, indicating that the impact of green finance and innovation on decarbonization varies across different national policy environments and economic structures. The data was gathered from publicly available sources, including the World Development Indicators (WDI) and OECD databases.