Regulating Green Finance and Managing Environmental Risks in the Conditions of Global Uncertainty

Background

This paper examines how growing global uncertainty, driven by geopolitical tensions, economic fragmentation, climate risks, and declining international cooperation, increases the environmental, energy, and socio-economic risks confronting countries. In this context, green finance is a strategic tool to support sustainable development and strengthen resilience; however, the green finance landscape remains highly fragmented, with uneven regulatory frameworks, large disparities between developed and developing countries, and persistent volatility that limits effective environmental risk management.

Goals and Methods

This study aims to assess the state of green financing and identify how regulatory measures influence green investments and environmental risks under global instability. Using data for the top ten countries with the highest green economic capabilities, the authors conduct regression and correlation analyses to evaluate: (1) how green investment levels affect environmental cost indicators, and (2) how regulatory factors, legal accessibility, timeliness, and property-rights protection shape green investment flows.

Conclusions and Takeaways

This study finds that green investment reduces environmental costs in developed economies but increases them in developing ones, reflecting institutional and structural constraints. Regulatory improvements strongly stimulate green finance in developing countries but have weaker effects in advanced economies. The authors conclude that country-specific regulatory strategies are essential, and more standardized, transparent governance mechanisms will be needed to reduce environmental risks and accelerate green transitions.