THE NEXUS BETWEEN GREEN FINANCE AND GEOPOLITICS: HOW THE US, EUROPE, AND CHINA COMPETE FOR GLOBAL SUSTAINABILITY LEADERSHIP

Abstract

The paper explores the intersection of green finance and geopolitics, specifically examining how the U.S., Europe, and China utilise green finance as a lever for sustainability leadership and global power. Using a mixed-methods approach, the study integrates the qualitative thematic analysis and quantitative econometric analysis to investigate the strategies of green finance, their effects on carbon emissions reduction, and the characteristics of international collaborations.Compared to quantitative findings, which show that all three regions differ in approach, qualitative findings illustrate that Europe leans towards regulatory frameworks with the intent of establishing global standards. At the same time, Chinese policymakers integrate green finance within broader national development objectives, with private sector-led initiatives playing a more dominant role in the United States. According to quantitative analysis, green finance plays a pivotal role in reducing carbon emissions. Renewable energy investments worth $1 billion result in a 0.20% decrease in emissions, while the issuance of green bonds reduces emissions by 0.15%. Network analysis also reinforces Europe’s central position in terms of potential global cooperation, China’s supremacy in green infrastructure initiatives, and the U.S.’s relatively few international partnerships.Compared to quantitative findings, which show all three regions differ in approach, qualitative findings illustrate that Europe leans towards regulatory frameworks with the intent of establishing global standards, while Chinese policymakers integrate green finance within broader national development objectives, with private sector-led initiatives playing a more dominant role in the United States. According to quantitative analysis, green finance plays a pivotal role in reducing carbon emissions. Renewable energy investments worth $1 billion result in a 0.20% decrease in emissions, while the issuance of green bonds reduces emissions by 0.15%. Network analysis also reinforces Europe’s central position in terms of potential global cooperation, China’s supremacy in green infrastructure initiatives, and the U.S.’s relatively few international partnerships.

Keywords: Green Finance; Geopolitics; US; Europe; China; Global Sustainability Leadership