Evolution of Green Finance in Accelerating Climate Change Mitigation: Analysis of Asean and Global Literature

Abstract

The global crisis of climate change currently poses an extraordinary challenge to humanity. This study aims to analyze the evolution of green finance and its role in accelerating climate change mitigation in the ASEAN region for the 2014-2024 period through comparison with global practices. The method used is library research with systematic analysis of academic literature and policy documents related to green finance in ASEAN and globally. This research identifies three phases of development: initiation (2014-2017), growth (2018-2020), and institutionalization (2021-2024), with the dominant instruments being green bonds and sustainable loans. Green finance instruments in ASEAN are dominated by green bonds and sustainable loans, with uneven distribution among member states. Singapore, Indonesia, and Malaysia have led the adoption, while CLMV countries (Cambodia, Laos, Myanmar, Vietnam) are still in the early stages of development. Contributions to climate change mitigation show positive results, especially in energy sector transformation, although still limited in scale. The impact of green finance on climate change mitigation is still limited, such as aggregate emission reductions, and countries with high green finance penetration experience faster renewable energy growth. In contrast, the climate finance gap in ASEAN is still significant. The role of green finance in accelerating climate change mitigation has proven effective, with renewable energy projects funded through green finance instruments showing more substantial emission reductions. Global practices such as the EU Taxonomy and the role of central banks provide essential guidance for accelerating green finance in ASEAN. However, considerable efforts are still needed to address the climate finance gap