The renewable energy market’s financing mechanisms significantly influence its growth and reliability. Understanding these impacts can guide policymakers in creating comprehensive policies to boost financial sector growth, reduce obstacles, introduce innovative electricity market financing mechanisms, ensure risk allocation, and consolidate energy finance sources. The study conducted a systematic review to identify issues and potential solutions that impact public and private green funding, as well as carbon emission reduction strategies for the transition to a greenhouse gas-free economy. The main goal was to look at how useful contracts for different financial instruments and carbon emission reduction initiatives are, as well as to identify scientific deficiencies in the existing body of work. The review deemed an overall number of 38 articles appropriate for inclusion. This study found evidence that financing mechanisms such as contracts of difference (CfDs) are crucial for acquiring large renewable investment projects and financing renewable energy capital-intensive assets. Sub-Saharan Africa and Southeast Asia, despite experiencing a consistent rise in energy demand, have lagged in effectively utilizing green financial markets, private financing mechanisms, and policies to tackle the financing and risk obstacles related to green energy. In European countries, green finance enhances energy and environmental performance. Given the unpredictable nature of likely planetary climate changes, adaptations are necessary to align with the changing environment.