INSTITUTIONAL AND FINANCIAL MECHANISMS FOR SHAPING ENVIRONMENTAL STRATEGY IN THE CONTEXT OF THE GREEN TRANSFORMATION OF THE GLOBAL ECONOMY

Abstract

The global economy is currently undergoing a fundamental shift characterized by the "decoupling" of economic growth from environmental degradation. This article examines the complex institutional and financial frameworks that underpin the green transformation of global markets. The relevance of the study is driven by the urgent need to achieve the goals of the Paris Agreement amidst growing geopolitical instability and a widening investment gap between developed and developing nations. The purpose of this research is to identify and analyze the key institutional and financial drivers that determine the effectiveness of environmental strategies at both global and national levels. The study focuses on how international organizations, regulatory standards, and market dynamics converge to accelerate or hinder the transition to a low-carbon economy. Methodology. The study employs a systematic approach to analyze data from leading international organizations, including the International Energy Agency (IEA), BloombergNEF, and the World Bank. Comparative analysis is used to assess regional disparities in green investment, while historical cost analysis highlights the shifting competitiveness of renewable energy technologies compared to traditional fossil fuels. Results. The research findings demonstrate that the green transformation has entered a new phase of economic viability. A key highlight is the dramatic decline in the levelized cost of energy (LCOE) for solar and wind power, which have fallen by approximately 85% and 60% respectively since 2009. This technological maturity provides a powerful economic incentive for decarbonization even when direct government subsidies are reduced. However, the study reveals a significant geographical imbalance: over 75% of climate-related investments are concentrated in China, the United States, and the European Union. In contrast, emerging markets receive only 18% of global clean energy funding, largely due to high perceived risks and the subsequent elevated cost of capital. Furthermore, the paper analyzes the role of institutional "architects" such as the International Sustainability Standards Board (ISSB) in unifying non-financial reporting. The adoption of these standards by 36 jurisdictions marks a significant step toward market transparency. The study also addresses the chronic underfunding of climate adaptation, which currently receives only 7% of total climate finance, despite the increasing frequency of extreme weather events. Conclusions. The research concludes that current financial turbulence and budget reallocations in some regions do not signal a reversal of the green course but rather a phase of institutional adaptation to new geopolitical realities. For countries like Ukraine, the strategy for post-war recovery must be aligned with the European Green Deal and the Carbon Border Adjustment Mechanism (CBAM). The transition requires not only increased capital flows but also reformed international financial mechanisms that can mitigate risks for private investors in volatile regions. Implementing "Build Back Better" principles and decentralizing energy systems through renewables are identified as critical steps for ensuring long-term national resilience and sustainable growth.