Climate finance, green technologies, energy transition and load capacity factor in MINTeconomies: assessing the environmental sustainability and validity of LCC hypothesis
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Date
2025
Journal Title
Journal ISSN
Volume Title
Publisher
Technological Sustainability
Abstract
Abstract
Purpose–Thisstudyaimstoevaluatetheinterplayofclimatefinance,greentechnologies,andenergytransition
in shaping environmental sustainability within the MINT economies (Mexico, Indonesia, Nigeria, Turkey),
using the load capacity factor (LCF) as a comprehensive ecological indicator.
Design/methodology/approach– The study adopts the Cross-Sectionally Augmented Autoregressive
Distributed Lag (CS-ARDL) approach, capturing periods from 2000 to 2021. The robustness of the findings
is subsequently reinforced through the application of Common Correlated Effects Mean Group and Dynamic
Common Correlated Effects Mean Group (DCCEMG) estimators.
Findings– The results reveal that climate finance significantly enhances the LCF, affirming its role in
promoting environmental sustainability through targeted investments in renewables. Energy transition exerts a
short-termnegativeimpactonLCF,reflectingthe“transitionalparadox,”whererelianceonenergiestemporarily
exacerbates ecologicalstrain. However,greentechnologiesshownostatisticallysignificanteffects,likely dueto
fragmented adoption in MINT economies. Lastly, the study explores the U-shaped trajectory proposed by the
LCC (load capacity curve) hypothesis and finds that it is not statistically validated for MINT economies.
Practical implications– Climate finance should prioritize high-impact renewables over transitional fuels to
accelerate long-term sustainability. Moreover, energy transition timelines must account for short-term
ecological costs; for instance, MINT nations could pair gas flaring reduction with decentralized solar grids to
mitigate transitional harm. Policymakers should consider implementing targeted financial instruments to
channel investments into sectors with the highest environmental returns.
Originality/value– This study introduces pioneering contributions to climate finance and sustainability
research by developing a first-of-its-kind climate finance index, which captures the pragmatic energy transition
strategies of emerging economies by integrating both renewable and transitional fuel investments.
Keywords Climate finance, Energy transition, Green tech, Environmental quality
Paper type Research article