Despite the overwhelming literature claiming the environmental benefits of the transition towards a green economy, the evidence favoring these broad claims is still obscure and fuzzy. The present study makes two significant contributions to this important yet unsettled issue. First, we segregate the overall green transition in G7 economies into three different manifestations i.e., Green Energy, Green Industry, and Green Trade, to evaluate their idiosyncratic effects on the environment. Second, we assess the moderating role of financial development in green transition and ultimately in achieving the COP-26 targets. Our findings indicate that the transition towards green energy and the green industrial sector improves environmental quality, and the benefits are more pronounced with a high degree of financial development. In contrast, the transition towards green trade does not help in improving environmental quality and may have some adverse effects; however, financial development could mitigate some of these undesirable effects and help combat carbon emissions. The study emphasizes that policymakers should view financial development as a crucial policy choice to achieve COP-26 targets owing to its benign environmental impact.

尽管有大量文献声称向绿色经济转型会带来环境效益，但支持这些广泛主张的证据仍然模糊不清。本研究对这一重要但尚未解决的问题做出了两项重大贡献。首先，我们将 G7 经济体的整体绿色转型分为三种不同的表现形式，即绿色能源、绿色工业和绿色贸易，以评估它们对环境的特殊影响。其次，我们评估了金融发展在绿色转型和最终实现 COP-26 目标方面的调节作用。我们的研究结果表明，向绿色能源和绿色工业部门的转型改善了环境质量，并且随着金融发展程度的提高，收益更加明显。相比之下，向绿色贸易转型无助于改善环境质量，并可能产生一些不利影响；然而，金融发展可以减轻其中一些不良影响，并有助于减少碳排放。该研究强调，由于金融发展对环境的良性影响，政策制定者应将金融发展视为实现 COP-26 目标的关键政策选择。