Green finance and privatization of green projects in the fossil fuels industry

Abstract

Despite growing awareness of environmental issues, there is limited understanding of how various economic factors, such as green finance and private sector investment, impact the sustainability of this industry. This study examines the sustainability challenges faced by the oil industry in selected OECD countries, focusing on factors that influence its long-term environmental viability. The findings indicate that green finance plays a crucial role in enhancing sustainability, with a 1% increase leading to a 0.31% improvement by promoting eco-friendly investments and reducing carbon emissions. Conversely, private sector investment has a negative impact, with a 1% rise causing a 0.36% decline in sustainability due to the focus on short-term financial returns. Additionally, power generation from fossil fuels and urbanization hinder sustainability by increasing emissions and resource consumption. The study suggests that to improve sustainability, OECD countries should focus on expanding green finance, incentivizing sustainable investments, and advancing digitization in green finance.