Green finance, fossil fuel efficiency, and sustainable development in OECD

This study investigates the effects of eco-friendly finance and fossil fuel efficiency on sustainability in 15 OECD countries from 2005 to 2021. A 1% increase in the Fossil Fuels Efficiency Index improves sustainability by 0.32% in the short term and 0.45% in the long term. Similarly, a 1% rise in green finance enhances sustainability by 0.16% short-term and 0.40% long-term. Negative impacts on sustainability were found from the Energy Security Risk Index, Carbon Footprint, and Economic Growth, while higher Income Levels boost sustainability. Fossil fuel efficiency has a greater effect on sustainability than green finance, highlighting the need to prioritize fossil fuel efficiency. Recommendations include promoting renewable energy, digitizing green finance, customizing marketing strategies, importing energy efficiency technologies, and implementing efficient green tax rates. •Fossil fuels efficiency enhances sustainability by 0.32% (short-term) and 0.45% (long-term).•Green finance enhances sustainability by 0.16% (short-term) and 0.40% (long-term).•OECD countries exhibit adverse effects from the Energy Security Risk Index, Carbon Footprint, and Economic Growth.•Fossil fuels efficiency demonstrates a stronger sustainability impact compared to green finance within the OECD.