Keywords
Green Economy
Green Finance
Green Innovation
Just Transition
Sustainable Development
How to Cite
Abstract
This study critically examines how green-economy policy instruments contribute to sustainable development in emerging economies, addressing gaps in understanding the institutional conditions and distributional consequences of sustainability transitions. Employing a critical narrative evidence-synthesis approach, the study evaluates Scopus-indexed literature published between 2013 and 2026, focusing on renewable energy, green innovation, green finance, fiscal interventions, and infrastructure. The synthesis compares economic, environmental, and social outcomes while assessing differences in methodological credibility, contextual relevance, and institutional capacity. The findings indicate that renewable energy and green innovation exhibit relatively consistent positive associations with economic and environmental performance, whereas the effectiveness of green finance and fiscal instruments is more dependent on regulatory credibility, financial-market development, and policy coordination. Evidence concerning employment creation, poverty reduction, and distributional equity remains less conclusive, highlighting potential trade-offs between environmental progress and socioeconomic inclusion. The study contributes a governance-centred and distribution-sensitive conceptual framework linking policy instruments, implementation mechanisms, institutional conditions, and development outcomes. Its principal theoretical contribution is distinguishing transition scale, measured through green investment and technological adoption, from transition quality, reflected in environmental effectiveness and equitable socioeconomic benefits. For Indonesia and comparable emerging economies, the findings emphasise the importance of institutional coordination, credible sustainable-finance governance, and just-transition policies to ensure that green-economy expansion translates into inclusive and sustainable development.
References
Adamowicz, M. (2022). Green Deal, Green Growth and Green Economy as a Means of Support for Attaining the Sustainable Development Goals. Sustainability. https://doi.org/10.3390/su14105901
Aldieri, L., & Vinci, C. P. (2018). Green Economy and Sustainable Development: The Economic Impact of Innovation on Employment. Sustainability. https://doi.org/10.3390/su10103541
Ali, E. B., Anufriev, V., & Amfo, B. (2021). Green economy implementation in Ghana as a road map for a sustainable development drive: A review. Scientific African. https://doi.org/10.1016/j.sciaf.2021.e00756
Anwar, A., Huong, N. T. T., Sharif, A., Kilinc‐Ata, N., Çitil, M., & Demirtaş, F. (2023). Is a green world real or a dream? A look at green growth from green innovation and financial development: Evidence from fragile economies. Geological Journal, 59, 112 - 98. https://doi.org/10.1002/gj.4844
Batrancea, L., Pop, M., Rathnaswamy, M. M., Batrancea, I., & Rus, M. (2021). An Empirical Investigation on the Transition Process toward a Green Economy. Sustainability. https://doi.org/10.3390/su132313151
Bina, O. (2013). The Green Economy and Sustainable Development: An Uneasy Balance?. Environment and Planning C: Government and Policy, 31, 1023 - 1047. https://doi.org/10.1068/c1310j
Borel-Saladin, J., & Turok, I. (2013). The Green Economy: Incremental Change or Transformation?. Environmental Policy and Governance, 23, 209-220. https://doi.org/10.1002/eet.1614
Candra, O., Chammam, A., Alvarez, J. N., Muda, I., & Aybar, H. (2023). The Impact of Renewable Energy Sources on the Sustainable Development of the Economy and Greenhouse Gas Emissions. Sustainability. https://doi.org/10.3390/su15032104
Chaaben, N., Elleuch, Z., Hamdi, B., & Kahouli, B. (2022). Green economy performance and sustainable development achievement: empirical evidence from Saudi Arabia. Environment, Development and Sustainability, 1 - 16. https://doi.org/10.1007/s10668-022-02722-8
D’Amato, D., & Korhonen, J. (2021). Integrating the green economy, circular economy and bioeconomy in a strategic sustainability framework. Ecological Economics, 188, 107143. https://doi.org/10.1016/j.ecolecon.2021.107143
Dar, B. I., Badwan, N., & Kumar, J. (2024). Investigating the role of Fintech innovations and green finance toward sustainable economic development: a bibliometric analysis. International Journal of Islamic and Middle Eastern Finance and Management. https://doi.org/10.1108/imefm-01-2024-0018
Dhayal, K. S., Giri, A., Kumar, A., Samadhiya, A., Agrawal, S., & Agrawal, R. (2023). Can green finance facilitate Industry 5.0 transition to achieve sustainability? A systematic review with future research directions. Environmental Science and Pollution Research, 30, 102158-102180. https://doi.org/10.1007/s11356-023-29539-w
Elimam, H. (2023). Opportunities and Constraints Confronting transformation Towards a Green Economy in the Developing Countries. Journal of Economics and Business. https://doi.org/10.31014/aior.1992.06.01.483
Fernandes, C., Veiga, P., Ferreira, J., & Hughes, M. (2021). Green growth versus economic growth: Do sustainable technology transfer and innovations lead to an imperfect choice?. Business Strategy and the Environment. https://doi.org/10.1002/bse.2730
Ferraz, D., & Pyka, A. (2023). Circular economy, bioeconomy, and sustainable development goals: a systematic literature review. Environmental Science and Pollution Research, 1-22. https://doi.org/10.1007/s11356-023-29632-0
Ferreira, J., Lopes, J., Gomes, S., & Dias, C. (2023). Diverging or converging to a green world? Impact of green growth measures on countries’ economic performance. Environment, Development and Sustainability, 1 - 19. https://doi.org/10.1007/s10668-023-02991-x
Georgeson, L., Maslin, M., & Poessinouw, M. (2017). The global green economy: a review of concepts, definitions, measurement methodologies and their interactions. https://doi.org/10.1002/geo2.36
Herman, K. S., Kim, Y. J., Shayegh, S., & Xiang, J. (2023). A critical review of green growth indicators in G7 economies from 1990 to 2019. Sustainability Science, 18, 2589-2604. https://doi.org/10.1007/s11625-023-01397-y
Houssam, N., Ibrahiem, D. M., Sucharita, S., El-Aasar, K. M., Esily, R. R., & Sethi, N. (2023). Assessing the role of green economy on sustainable development in developing countries. Heliyon, 9. https://doi.org/10.1016/j.heliyon.2023.e17306
John, H. B., Agrawal, M., Nema, P., Hasan, A., Rakhra, I. K., & Singh, A. (2025). Green growth: a bibliometric analysis of digital innovation and Sustainable Development Goals (SDGs). Journal of Innovation and Entrepreneurship, 14. https://doi.org/10.1186/s13731-025-00473-0
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. https://doi.org/10.3390/su11174615
Khoshnava, S. M., Rostami, R., Zin, R. M., Kamyab, H., Majid, M. A. A., Yousefpour, A., & Mardani, A. (2020). Green efforts to link the economy and infrastructure strategies in the context of sustainable development. Energy, 193, 116759. https://doi.org/10.1016/j.energy.2019.116759
Khoshnava, S. M., Rostami, R., Zin, R. M., Štreimikienė, D., Yousefpour, A., Mardani, A., & Alrasheedi, M. A. (2019). Contribution of green infrastructure to the implementation of green economy in the context of sustainable development. Sustainable Development, 28, 320-342. https://doi.org/10.1002/sd.2017
Kumar, B., Kumar, L., Kumar, A., Kumari, R., Tagar, U., & Sassanelli, C. (2023). Green finance in circular economy: a literature review. Environment, Development and Sustainability, 1 - 41. https://doi.org/10.1007/s10668-023-03361-3
Li, Y., Meydan, A. G., Wei, C., & Zhao, G. (2025). How does green budget revenue policy promote economic sustainable development? Empirical evidence from 107 global economies. Frontiers in Environmental Science. https://doi.org/10.3389/fenvs.2025.1705590
Liao, X., Bresciani, S., Troise, C., Bukhari, W. A. A., & Bukhari, A. A. A. (2025). How Solar, Wind, and Biomass Energy Create Sustainable Pathways Towards Green Economic Growth? Insights From the Top Five Global Renewable Energy Economies. Sustainable Development. https://doi.org/10.1002/sd.3345
Loiseau, E., Saikku, L., Antikainen, R., Droste, N., Hansjürgens, B., Pitkänen, K., Leskinen, P., Kuikman, P., & Thomsen, M. (2016). Green economy and related concepts: An overview. Journal of Cleaner Production, 139, 361-371. https://doi.org/10.1016/j.jclepro.2016.08.024
Luo, S., Yimamu, N., Li, Y., Wu, H., Irfan, M., & Hao, Y. (2022). Digitalization and sustainable development: How could digital economy development improve green innovation in China?. Business Strategy and the Environment. https://doi.org/10.1002/bse.3223
Lyeonov, S., Pimonenko, T., Bilan, Y., Štreimikienė, D., & Mentel, G. (2019). Assessment of Green Investments’ Impact on Sustainable Development: Linking Gross Domestic Product Per Capita, Greenhouse Gas Emissions and Renewable Energy. Energies. https://doi.org/10.3390/en12203891
Merino-Saum, A., Clement, J., Wyss, R., & Baldi, M. (2019). Unpacking the Green Economy concept: A quantitative analysis of 140 definitions. Journal of Cleaner Production, 242, 118339. https://doi.org/10.1016/j.jclepro.2019.118339
Neumann, T. (2022). Impact of green entrepreneurship on sustainable development: An ex-post empirical analysis. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2022.134317
Ortega Carrasco, P., Iannone, F., Vílchez, V. F., & Testa, F. (2024). Green public procurement as an effective way for sustainable development: A systematic literature review and bibliometric analysis. Sustainable Development. https://doi.org/10.1002/sd.3234
Pegels, A., & Altenburg, T. (2020). Latecomer development in a “greening” world: Introduction to the Special Issue. World Development, 135, 105084. https://doi.org/10.1016/j.worlddev.2020.105084
Raman, R., Ray, S., Das, D., & Nedungadi, P. (2025). Innovations and barriers in sustainable and green finance for advancing sustainable development goals. Frontiers in Environmental Science. https://doi.org/10.3389/fenvs.2024.1513204
Rasoulinezhad, E., & Taghizadeh‐Hesary, F. (2022). Role of green finance in improving energy efficiency and renewable energy development. Energy Efficiency, 15. https://doi.org/10.1007/s12053-022-10021-4
Sarkodie, S., Owusu, P. A., & Taden, J. (2023). Comprehensive green growth indicators across countries and territories. Scientific Data, 10. https://doi.org/10.1038/s41597-023-02319-4
Tamasiga, P., Mfuni, H., Onyeaka, H., & Ouassou, E. H. (2023). Green industrial policy as an enabler of the transition to sustainability: challenges, opportunities and policy implications for developing countries. Environment, Development and Sustainability, 1-22. https://doi.org/10.1007/s10668-023-03952-0
Tawiah, V., Zakari, A., & Adedoyin, F. (2021). Determinants of green growth in developed and developing countries. Environmental Science and Pollution Research International, 28, 39227 - 39242. https://doi.org/10.1007/s11356-021-13429-0
Usman, B., Johl, S. K., & Khan, P. (2024). Fusion of Green Governance for Sustainable Development and World Ecology: A Tempting Systematic Review and Bibliometric Analysis. Journal of Open Innovation: Technology, Market, and Complexity. https://doi.org/10.1016/j.joitmc.2024.100309
Wang, K.-H., Zhao, Y.-X., Jiang, C.-F., & Li, Z. (2022). Does green finance inspire sustainable development? Evidence from a global perspective. Economic Analysis and Policy. https://doi.org/10.1016/j.eap.2022.06.002
Zhu, J. J., Zhang, R., Kanhalikham, K., & Shen, X. (2023). Green economy studies amongst the global climate change challenge between 2016 and 2022: a bibliometric review. https://doi.org/10.3389/fevo.2023.1168437
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright (c) 2026 Hasanuddin Economics and Business Review