Nexus of Geopolitical Risk, Investment in Renewable Energy, and Green Finance for Carbon-Neutrality

This study contributes to the existing literature by jointly examining the effects of geopolitical risk (GPR), investment in renewable energy (IRE), and green finance on the transition toward carbon-free energy and carbon neutrality, rather than considering these factors independently. The study provides novel evidence on how geopolitical dynamics and sustainable financial mechanisms interact to accelerate the clean energy transition across economies with diverse energy structures and development trajectories. The findings show that GPR significantly predicts CO 2 emissions. In contrast, IRE and green finance effectively lower carbon emissions and bolster nationwide competencies to counter climate change challenges. The significant role of GPR in CO 2 emissions suggests that governments must take focused measures to reduce sectoral and geopolitical risks to strengthen investors’ confidence in green projects, like IRE, while also increasing assets in green recovery initiatives, leading to achieving a sustainable environment and a zero-carbon society. The study contributes to Sustainable Development Goals by promoting environmental sustainability and carbon neutrality.