SFeDu
of.211, Gorgoko St., 88 
Rostov-on-Don
Russia
344002
+7 (863) 250-59-54
This email address is being protected from spambots. You need JavaScript enabled to view it.
te@sfedu.ru

TERRA ECONOMICUS

Green finance and the economic threats during COVID-19 pandemic


TERRA ECONOMICUS, , Vol. 19(no. 2),

Our paper aims at describing the links between green finance and sustainable development in the lightof the environmental threats and natural disasters represented by the recent coronavirus pandemiccaused by the COVID-19 virus. The recent situation heavily impacted on the financial and bankingsystem and transformed the way it has functioned before. Moreover, it demonstrated that the bankingsystem is more vulnerable than it should be. The banking sector has shown little capacity to absorbunexpected risks, owing to far-reaching international financial reforms. There are indications thatsome banks are on the verge of collapse, while some non-bank financial institutions and markets needimmediate support. A decade after the financial crisis, the world is still struggling with the problemsposed by the events of 2007–2009. Moreover, decisions taken during the crisis increased the risk thatpandemic financial stress would develop into a banking crisis over time. Our paper shows that nowthere is a need for the creation of healthy environment marked by the carbon-free and environmentallyfriendlyapproaches, and the green finance might help us to achieve that goal. Our results make it clearthat by promoting such instruments as green bonds, green loans and green mortgages stakeholders andpolicy-makers might help to create a more sustainable future for the people, their natural environment,and the economy as a whole.
Citation: Streimikiene, D., Kaftan, V. (2021). Green finance and the economic threats during COVID-19 pandemic. Terra Economicus 19(2): 105–113. DOI: 10.18522/2073-6606- 2021-19-2-105-113


Keywords: green finance; economic systems; sustainable development; institutional change; COVID-19; banking and finance

JEL codes: M31, O44, Q56, Q59

References:
  • Ansari D., Holz F. (2020). Between stranded assets and green transformation: Fossil-fuel-producing developing countries towards 2055. World Development 130: 104947. https://doi.org/10.1016/j. worlddev.2020.104947
  • Batrancea I., Batrancea L., Maran Rathnaswamy M., Tulai H., Fatacean G., Rus M.I. (2020). Greening the financial system in USA, Canada and Brazil: A Panel Data Analysis. Mathematics 8(12): 2217. https://doi.org/10.3390/math8122217
  • Bolton P., Musca X., Samama F. (2020). Global public-private investment partnerships: A financing innovation with positive social impact. Journal of Applied Corporate Finance 32(2): 31–41. https://doi.org/10.1111/jacf.12403
  • Bos K., Gupta J. (2019). Stranded assets and stranded resources: Implications for climate change mitigation and global sustainable development. Energy Research & Social Science 56: 101215. https://doi.org/10.1016/j.erss.2019.05.025
  • Čábelková I., Blaginin V., Strielkowski W., Platitsyn A. (2020). Sustainable education: altering the opinions on renewable energy sources. E3S Web of Conferences 208: 09001. https://doi. org/10.1051/e3sconf/202020809001
  • Chen M., Sinha A., Hu K., Shah M.I. (2021). Impact of technological innovation on energy efficiency in industry 4.0 era: Moderation of shadow economy in sustainable development. Technological Forecasting and Social Change 164: 120521. https://doi.org/10.1016/j.techfore.2020.120521
  • Clark R., Reed J., Sunderland T. (2018). Bridging funding gaps for climate and sustainable development: Pitfalls, progress and potential of private finance. Land Use Policy 71: 335–346. https://doi.org/10.1016/j.landusepol.2017.12.013
  • Deschryver P., De Mariz F. (2020). What future for the green bond market? How can policymakers, companies, and investors unlock the potential of the green bond market? Journal of Risk and Financial Management 13(3): 61. https://doi.org/10.3390/jrfm13030061
  • Didier T., Huneeus F., Larrain M., Schmukler S.L. (2021). Financing firms in hibernation during the COVID-19 pandemic. Journal of Financial Stability 53: 100837. https://doi.org/10.1016/j. jfs.2020.100837
  • Estevão M. (2020). Climate-smart fiscal policy can foster a lasting economic recovery. One Earth 3(3): 273–276. https://doi.org/10.1016/j.oneear.2020.08.017
  • Fan S., Teng P., Chew P., Smith G., Copeland L. (2021). Food system resilience and COVID-19–Lessons from the Asian experience. Global Food Security 28: 100501. https://doi.org/10.1016/j.gfs.2021.100501
  • Faske B. (2018). Turning billions into (green) trillions: Tracking the growth and development of the green bond market in China, France, India, and the United States. Tulane Environmental Law Journal 31(2): 293–325.
  • Flammer C. (2020). Green bonds: effectiveness and implications for public policy. Environmental and Energy Policy and the Economy 1(1): 95–128. https://doi.org/10.1086/706794
  • Fues T. (2020). Guardian of the Common Good or National Power Projection? What Role for the G20 in the Global Partnership for Sustainable Development? pp. 101–115. In: J. Whalley, M. Agarwal (eds.) Economics of G20. A World Scientific Reference, vol 2: How Developing Countries can Achieve Sustainable Development Goals. World Scientific. https://doi.org/10.1142/9789811214776_0004
  • García-Sánchez I.M., Rodríguez-Ariza L., Aibar-Guzmán B., Aibar-Guzmán C. (2020). Do institutional investors drive corporate transparency regarding business contribution to the sustainable development goals? Business Strategy and the Environment, 29(5), 2019-2036. https://doi. org/10.1002/bse.2485
  • Geden O., Scott V., Palmer J. (2018). Integrating carbon dioxide removal into EU climate policy: Prospects for a paradigm shift. Wiley Interdisciplinary Reviews: Climate Change 9(4): e521. https://doi.org/10.1002/wcc.521
  • Giese J., Haldane A. (2020). COVID-19 and the financial system: a tale of two crises. Oxford Review of Economic Policy 36(1): S200–S214. https://doi.org/10.1093/oxrep/graa035
  • Griffin P.A., Myers Jaffe A. (2018). Are fossil fuel firms informing investors well enough about the risks of climate change? Journal of Energy & Natural Resources Law 36(4): 381–410. https://doi. org/10.1080/02646811.2018.1502240
  • Katona K. (2020). Is lack of morality an explanation for the economic and financial crisis? A Catholic point of view. International Advances in Economic Research 26(4): 407–418. https://doi. org/10.1007/s11294-020-09809-w
  • Khoshnava S.M., Rostami R., Zin R.M., Štreimikienė D., Yousefpour A., Strielkowski W., Mardani A. (2019). Aligning the criteria of green economy (GE) and sustainable development goals (SDGs) to implement sustainable development. Sustainability 11(17): 4615. https://doi.org/10.3390/su11174615
  • Lisin E., Shuvalova D., Volkova I., Strielkowski W. (2018). Sustainable development of regional power systems and the consumption of electric energy. Sustainability 10(4): 1111. https://doi. org/10.3390/su10041111
  • Liu Y., Lee J.M., Lee C. (2020). The challenges and opportunities of a global health crisis: the management and business implications of COVID-19 from an Asian perspective. Asian Business & Management 19: 277–297. https://doi.org/10.1057/s41291-020-00119-x
  • Louche C., Busch T., Crifo P., Marcus A. (2019). Financial markets and the transition to a low-carbon economy: Challenging the dominant logics. Organization & Environment 32(1), 3–17. https:// doi.org/10.1177/1086026619831516
  • Lu J., Ren L., Yao S., Qiao J., Strielkowski W., Streimikis J. (2019). Comparative review of corporate social responsibility of energy utilities and sustainable energy development trends in the Baltic states. Energies 12(18): 3417. https://doi.org/10.3390/en12183417
  • Migliorelli M. (2021). What do we mean by sustainable finance? Assessing existing frameworks and policy risks. Sustainability 13(2): 975. https://doi.org/10.3390/su13020975
  • Nassiry D. (2018). The role of fintech in unlocking green finance: Policy insights for developing countries (https://www.econstor.eu/handle/10419/190304)
  • Nepal R., Phoumin H., Khatri A. (2021). Green technological development and deployment in the Association of Southeast Asian Economies (ASEAN)—At Crossroads or Roundabout? Sustainability 13(2): 758. https://doi.org/10.3390/su13020758
  • Optiver (2020). The role of capital markets in green transition (https://www.optiver.com/insights/ news-articles/the-role-of-capital-markets-in-the-green-transition)
  • Parra P.Y., Hauenstein C., Oei P.Y. (2021). The death valley of coal–Modelling COVID-19 recovery scenarios for steam coal markets. Applied Energy 288: 116564. https://doi.org/10.1016/j. apenergy.2021.116564
  • Polukhina A., Sheresheva M., Efremova M., Suranova O., Agalakova O., Antonov-Ovseenko A. (2021). The Concept of Sustainable Rural Tourism Development in the Face of COVID-19 Crisis: Evidence from Russia. Journal of Risk and Financial Management 14(1): 38. https://doi.org/10.3390/jrfm14010038
  • Rahman A. (2020). Currency Democracy: The Theory of Organic Global Monetary. New York: Global Currency Initiative.
  • Shahbaz M., Nasir M.A., Hille E., Mahalik, M.K. (2020). UK’s net-zero carbon emissions target: Investigating the potential role of economic growth, financial development, and R&D expenditures based on historical data (1870–2017). Technological Forecasting and Social Change 161: 120255. https://doi.org/10.1016/j.techfore.2020.120255
  • Štreimikienė D., Strielkowski W., Bilan Y., Mikalauskas I. (2016). Energy dependency and sustainable regional development in the Baltic states: A review. Geographica Pannonica 20(2): 79–87. https://doi.org/10.5937/GeoPan1602079S
  • Štreimikienė D., Strielkowski W., Lisin E., Kurdiukova G. (2020). Pathways for sustainable development of urban heat supply systems. E3S Web of Conferences 208: 04001. https://doi.org/10.1051/ e3sconf/202020804001
  • Strielkowski W., Firsova I., Lukashenko I., Raudeliūnienė J., Tvaronavičienė M. (2021). Effective management of energy consumption during the COVID-19 pandemic: The role of ICT solutions. Energies 14(4): 893. https://doi.org/10.3390/en14040893 Strielkowski W., Volkova E., Pushkareva L., Streimikiene D. (2019). Innovative policies for energy efficiency and the use of renewables in households. Energies 12(7): 1392. https://doi. org/10.3390/en12071392
  • Wójcik D., Ioannou S. (2020). COVID-19 and Finance: Market Developments So Far and Potential Impacts on the Financial Sector and Centres. Tijdschrift voor economische en sociale geografie, 111(3), 387-400. https://doi.org/10.1111/tesg.12434
  • World Bank (2020). Supporting climate business opportunities in emerging markets (https://www. worldbank.org/en/news/feature/2020/05/07/supporting-climate-business-opportunities-inemerging-markets)
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606