Regional Finance and Environmental Outcomes: Empirical Evidence from Kazakhstan’s Regions
Satanbekov N. Adambekova A. Adambekov N. Anessova A. Adambekova Z.
February 2026Multidisciplinary Digital Publishing Institute (MDPI)
Economies
2026#14Issue 2
This study investigates how financial growth connects to regional environmental performance within the framework of policies aimed at reducing carbon emissions. It uses a comprehensive panel dataset covering the period from 2010 to 2024. Although Kazakhstan has set ambitious targets, significant differences in financing levels and institutional development across regions pose substantial obstacles to achieving the target emissions reductions. Employing regional panel data, we use a random-effects model to assess links among banking loans, governmental funding metrics, employment statistics, and pollution measurements. Principal component analysis is utilized to tackle potential collinearity and reveal fundamental patterns. This approach reflects the inherent differences between regions rather than evolutionary shifts. The obtained empirical data demonstrate a significant relationship between high levels of bank loans and reduced carbon emissions. Regions with better access to financial services are better positioned to invest in energy efficiency, green infrastructure, and green innovation. Conversely, increases in regional budgets are associated with rising emissions, as tax revenue growth primarily comes from industries most dependent on fossil fuels. Dependence on the national budget for subsidies exacerbates distortions in regional budgets’ relationship with the regions’ transition to low-carbon development. The findings confirm the importance of regional financial management in determining the path to reducing greenhouse gas emissions. Based on this, it is proposed to transform the mechanism of interbudgetary relations to grant regions greater financial autonomy and to localize credit resources at the regional level to accelerate the transition to a low-carbon economy in Kazakhstan.
air emissions , bank loans , Kazakhstan , local budget , regional finance , sustainable development
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Department of Finance, Accounting and Management, Abay Myrzakhmetov Kokshetau University, Kokshetau, 020000, Kazakhstan
Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty, 050040, Kazakhstan
School of Economics and Management, Narxoz University, Almaty, 050038, Kazakhstan
Economics and Business Department, International Information Technologies University, Almaty, 050040, Kazakhstan
Higher School of Economics and Management, Caspian University, Almaty, 050000, Kazakhstan
Department of Finance
Higher School of Economics and Business
School of Economics and Management
Economics and Business Department
Higher School of Economics and Management
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