Green Finance and Carbon Emission Intensity in South Africa’s Metal Production Sector: Evidence from an ARDL Approach

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Abstract
This study investigates the impact of green finance on carbon emission intensity in South Africa’s metal production sector, utilizing the ARDL econometric model. South Africa faces the complex task of promoting economic expansion without compromising long-term environmental sustainability, given its fossil-fuel-dependent energy system and energy-intensive industries. Green finance, encompassing green credit, climate investment, and funding for eco-friendly projects, could be instrumental in mitigating emissions. This research analyzes both the short-term and long-term dynamics between green finance and carbon emission intensity, considering economic growth and metal output as additional explanatory variables. The findings indicate that green finance consistently reduces carbon emission intensity in both the long and short term. Over both horizons, annual gross domestic product growth was found to decrease carbon emission intensity, while metal production output was found to increase carbon emission intensity. These results offer valuable policy recommendations for achieving environmental objectives and long-term, responsible development. Overall, the findings deepen understanding of how financial systems can support climate mitigation efforts in emerging markets.

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