Publication Details
Abstract
This study examines the theoretical and empirical linkages between green economy frameworks and sustainable economic growth, focusing on how investments in renewable energy, carbon reduction strategies, and environmental governance collectively influence long-run GDP trajectories across a diverse panel of 42 economies over the period 2005–2022. The primary objective is to evaluate which components of green economy transition exert the most statistically significant and economically meaningful effects on sustained output expansion. The study employs a mixed-methods design integrating systematic literature review, panel data econometric modelling (fixed-effects and random-effects estimation with Hausman specification testing), and k-means cluster analysis. Data were sourced from World Bank Development Indicators, OECD Environmental Statistics, and the Environmental Performance Index (EPI) database. Robustness was assessed through heteroskedasticity-corrected standard errors and sensitivity tests. Results indicate that green investment (β = 0.412, p < 0.001) and renewable energy share (β = 0.287, p < 0.001) are the strongest positive predictors of GDP growth. Countries classified in the advanced green economy cluster demonstrated average annual growth rates 1.5–2.1 percentage points higher than conventionally managed counterparts, while simultaneously achieving statistically significant reductions in carbon emission intensity. The model explains approximately 78.9% of variance in growth outcomes (R² = 0.789). The paper contributes an integrative analytical framework bridging endogenous growth theory, ecological modernisation theory, and the UNEP Green Economy Model. Unlike prior studies that treat these paradigms in isolation, the present work operationalises their joint effects through a composite Green Economy Index (GEI), offering a novel empirical tool for comparative policy analysis. Findings suggest that national governments should prioritise regulatory reform supporting green public investment, carbon pricing, and clean technology diffusion. International financial institutions are advised to expand concessional lending instruments oriented towards low-emission infrastructure in emerging markets. Data availability constrained the sample to 42 countries, limiting generalisability to low-income economies with weak statistical systems. Future research should extend the panel horizon beyond 2022, incorporate sectoral disaggregation of green investment, and test causality through Granger procedures and structural equation modelling.