New trends in climate finance under the carbon neutrality world: The case of Denmark

Article ID: 902

Abstract

Climate change poses a critical global challenge necessitating innovative financial mechanisms to facilitate the transition to a low-carbon economy. This study explores emerging trends in climate finance, using Denmark as a case study, to evaluate their role in achieving carbon neutrality. Employing a mixed-methods approach, the research integrates quantitative data analysis with qualitative insights, utilizing descriptive statistics, regression analysis, and time-series analysis to assess the effectiveness of green bonds, carbon pricing mechanisms, climate insurance, and climate-focused venture capital in mobilizing resources and promoting low-carbon investments. The findings indicate substantial growth in green bond issuance, significant emission reductions through carbon pricing, enhanced resilience via climate insurance, and increased innovation driven by climate-focused venture capital. Statistical analysis reveals that higher carbon tax rates and increased emissions trading volumes are strongly correlated with greater reductions in greenhouse gas emissions. The study underscores the effectiveness of these financial instruments in advancing Denmark’s carbon neutrality goals and offers a scalable model for other nations. Nonetheless, challenges such as standardization, political acceptance, and economic competitiveness must be addressed to maximize the global impact of climate finance. This research contributes to the field by providing a comprehensive evaluation of climate finance mechanisms within Denmark and demonstrates their potential for global adaptation and scaling. The findings provide actionable insights for policymakers, investors, and stakeholders to strengthen the role of finance in achieving carbon neutrality.