Effect of green bond, credit default swap, and geopolitical risk on environmental degradation: Sectoral evidence from China
Social Sciences and Humanities Open, cilt.14, 2026 (Scopus)
- Yayın Türü: Makale / Tam Makale
- Cilt numarası: 14
- Basım Tarihi: 2026
- Doi Numarası: 10.1016/j.ssaho.2026.103230
- Dergi Adı: Social Sciences and Humanities Open
- Derginin Tarandığı İndeksler: Scopus, Directory of Open Access Journals
- Anahtar Kelimeler: China, CO2 emissions, Credit default swap, Geopolitical risk, Green bonds, WLMC method
- Boğaziçi Üniversitesi Adresli: Evet
Özet
Countries have been dealing with environmental issues and searching for solutions. By considering China's leading position among the highest carbon dioxide (CO2)-emitting countries, as well as the lack of sectoral examination, this study uncovers the interrelationships among green bonds (GBs), credit default swap (CDS) spreads, geopolitical risk (GPR), and CO2 emissions in China. In doing this, the study considers main sectors (i.e., transport, industry, and power) and total CO2 emissions to consider sectoral heterogeneity, uses monthly data from 2019/1 to 2026/2, and applies the Wavelet Local Multiple Correlation (WLMC) method. The study empirically reveals that (i) in bi-variate analysis, GB, CDS, and GPR have mixed association with sectoral CO2 emissions across terms; (ii) in multivariate analysis, GB, CDS, and GPR have a positive association with sectoral and total CO2 emissions; (iii) at the sectoral level, GPR and CDS have a negative association with power sector and total CO2 emissions across short-term and medium-term. Also, GB has a mixed association with sectoral and total CO2 emissions across the medium-term; (iv) the dominant variable varies across sectors and terms, where CDS and GB are leading at short-term and long-term, while CDS and GPR are pioneering in medium-term; (v) the outcomes, where dominance of effective factors is searched, do not differ across aggregated and disaggregated level CO2 emissions. Thus, empirical outcomes highlight the differentiating association of the factors with sectoral and total CO2 emissions, whereas the dominance of the factors is stable across sectoral and total CO2 emissions. Accordingly, relying on the empirical findings, the study discusses various policy options for Chinese policymakers in decarbonizing economic sectors.