Institutional quality, financial development and the influence of environmental factors on carbon emissions: evidence from a global perspective

Assessing the influence of land use, agricultural, industrialization, CO2 emissions, and energy intensity on cereal production

In light of the growing global demand for food and the urgent need to address environmental challenges, it is essential to understand the factors that influence cereal production. This research set out to examine the intricate relationships between land use practices, agricultural methods, industrialization, energy intensity, carbon emissions, urban population growth, gross domestic savings, and cereal production across fifteen key cereal-producing states in the Americas. The study employs a Panel VAR/GMM model with data spanning from 2000 to 2021. The findings indicate that the lag of all variables exerts a strong, positive, and statistically significant effect on their current values. However, the lag of cereal production on other variables reveals a mixed and weaker effect, with cereal production showing a slight negative impact on land use and carbon dioxide (CO2) emissions. Conversely, the lag of land use positively influences cereal production, underscoring land management's crucial role. Meanwhile, the lag of agricultural practices, while mostly insignificant on other variables including cereal production, negatively affects urban population growth, suggesting that agricultural activities may slow urbanization. Additionally, industrialization has no significant effect on cereal production, except a weak negative influence on CO2 emissions and energy intensity. In contrast, Carbon dioxide emissions, exhibit a significant negative effect on cereal production, highlighting their detrimental impact on agricultural output. Moreover, the lag of energy intensity negatively affects CO2 emissions, suggesting more efficient energy use could help reduce emissions. Meanwhile, Urban population growth also has a significant negative impact on cereal production, indicating that urbanization may harm food security. The effect of gross domestic savings is generally weak and statistically insignificant across variables, though it shows some negative influence on both cereal production and urban population growth. Lastly, Granger causality tests show significant bidirectional causality between land use and cereal production, as well as between CO2 emissions and cereal production. The stability tests indicate that the model remains stable with impulse response functions. Based on these findings, the study offers practical policy implications, acknowledges limitations, and suggests future research directions, providing valuable insights for balancing agricultural productivity, environmental sustainability, and urban development.

Renewable energy and ecological footprint nexus: Evidence from dynamic panel threshold technique

The escalating phenomenon of environmental degradation is an urgent global concern, imperiling ecosystems and hindering the prospects for sustainable development on a planetary scale. Therefore, this study aims to explore the intricate interplay between renewable energy (RE) and ecological footprint (EF), considering the conditional impact of fiscal capacity (FIC), human development (HDI), institutional quality (IQI), and population density (PDN). Drawing on panel data encompassing 74 developing countries from 2000 to 2022, the study employs a dynamic panel threshold regression method, both with and without an instrumental variable approach. The findings unveil a non-linear nexus between RE and EF, revealing significant threshold values for FIC (1.870), HDI (0.736), and IQI (0.311), above which RE showcases its efficacy in mitigating EF. Conversely, when these predictors dip below the thresholds of FIC (1.391), HDI (0.655), and IQI (0.2545), the impact of RE on FE becomes insignificant. Moreover, the study introduces PDN as an additional threshold variable in the analysis, pinpointing that the effectiveness of RE in reducing EF hinges on PDN being below a threshold value of 263.144; however, above a threshold value of 276.98, the influence of PDN on the RE-FE nexus diminishes. The findings underscore the complexity of policy landscapes in developing countries. They suggest that while promoting renewable energy is pivotal for environmental sustainability, it is equally imperative to bolster existing environmentally friendly fiscal capacity, advance human capital, enhance institutional quality, and craft effective population distribution policies.

The impact of green FDI on environmental quality in less developed countries: A case study of load capacity factor based on PCSE and FGLS techniques

This paper examines the effect of green foreign direct investment (GFDI) on environmental quality (EQ) in 34 less-developed countries (LDCs) from 2003 to 2021. We analyze balanced panel data using Feasible Generalized Least Squares (FGLS) and Panel-Corrected Standard Errors (PCSE). Our findings reveal several vital insights: (1) GFDI helps improve EQ. (2) Environmental costs associated with economic growth are negative. (3) Trade openness positively influences EQ. (4) EQ is enhanced by institutional quality, energy use, and population expansion in the chosen countries. (5) The existence of a U-shaped curve was established. This is valuable to the relatively scanty literature on GFDI, especially in LDCs. To the best of our awareness, this study simultaneously employs the Load Capacity Factor (LCF) and Total Value of Announced Greenfield projects as proxies for environmental sustainability and GFDI for the first time. Secondly, incorporating PCSE and FGLS models in this context is an innovative methodological strategy. The present research work provides to the existing theoretical and empirical discussions on GFDI and EQ and has practical implications that inform policy-making.

Financial development and environmental quality in developed countries: a systematic literature review

Studying the effect of financial development on environmental quality has become imperative in the modern world due to the climate change challenges. Hence, this systematic literature review provides a comprehensive overview of the existing body of knowledge on the nexus of financial development and environmental quality in developed countries. Three databases: Web of Science, Scopus, and Google Scholar were used to search the relevant articles in this domain. Finally, 20 journal articles qualified for the systematic literature review based on the pre-defined article inclusion criteria as per the Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) framework. We found that a range of econometric approaches were used in all examined papers, employing a diverse range of proxy variables to model the relationship between financial development and environmental quality. Overall, the findings of the examined papers imply mixed evidence of this nexus in developed countries. We highlight the knowledge gap in this research domain examining the financial development and environmental quality link from different proxies.

Ecofeminism or techno-centrism? Analysing the gender-environment concoction in the Anthropocene: a study of OECD countries

Women's participation and technological innovation have a crucial role in ensuring environmental sustainability in the long-run. However, the nature of this relationship has diverse opinions across the continuum. The present study focuses on the empirical relevance of this debate based on the theoretical underpinnings of ecofeminism and techno-centrism, using panel data on 37 OECD countries for the period 1990-2019. Employing the Pooled Mean Group (PMG) approach, the study constructs two models, based on ecofeminism and techno-centrism, respectively, and finds that both have a negative and significant impact on environmental degradation measured by the ecological footprint. The results suggest that equality of women in the labour markets and technological innovation through R&D expenditure are both viable developmental tools for ensuring environmental sustainability. Moreover, the empirical estimation also confirms the existence of an N-shaped environmental Kuznets curve between economic growth and environmental degradation in the case of selected OECD countries in both ecofeminist and techno-centric models.

Environmental impact of foreign direct investment in Turkey: does the quality of institutions matter? Evidence from time series analysis using the Fourier extension

Since the 1980s, Turkey has experienced a significant increase in both foreign direct investment (FDI) and its ecological footprint (EFP). While FDI is widely acknowledged as a pivotal driver of economic growth, its impact on environmental degradation is multifaceted and debated. Moreover, a country's institutional framework plays a key role in shaping this relationship. Yet, the influence of institutional structures on the FDI-environment nexus is often neglected in current literature. In this study, we investigate the environmental implications of FDI in Turkey from 1984 to 2018, employing time series analysis with a Fourier extension and accounting for institutional quality. Fourier function models give more effective results in modeling structural breaks. We first use Fourier techniques to assess the unit root and cointegration relationship. Upon establishing cointegration, we employ the DOLS estimator, extended with Fourier terms, to determine the long-term coefficients. We then assess the causal relationship between the variables using the Fourier causality test. Our findings indicate that while FDI exacerbates environmental degradation (supporting the pollution haven hypothesis), the interaction term of FDI-institutional quality mitigates this degradation (supporting the pollution halo hypothesis). Given these empirical findings, this study suggests that strengthening Turkey's institutional quality has the potential to amplify the environmental advantages of FDI, alongside its economic benefits.

Carbon footprints of lending and bank performance: international evidence from panel data

The paper studies the interaction between a set of bank performance indicators (concentration, profitability, and risk) and the carbon footprint of bank loans. Our research builds on the panel data analysis for 37 countries during 2010-2018, adopting local projections proposed by Jordá (Am Econ Rev 95(1):161-182, 2005), a feasible alternative to panel VAR estimation in case of short time series. In order to account for potentially different patterns in the relationship among the indicators, we split the whole panel into two sub-panels, using K-means clusterization based on income level, resource abundance, and overall environmental performance. For the whole panel, the carbon footprint is driven by systemic risk, while leading the non-performing loans (NPL) ratio and Z-score. Thus, curbing systemic risk matters to reduce the carbon footprint of bank loans. Otherwise, it may amplify the effects of the latter on the NPL ratio and Z-score. Interestingly, the effect of systemic risk on the carbon footprint stems from the sub-panel consisting of developed countries, while the effect of the carbon footprint on the NPL ratio and Z-score is mainly shaped by developing and emerging market economies. The relationships between the carbon footprint of lending, concentration, and profitability are much less pronounced both for the whole panel and for the sub-panels.

The effects of trade, renewable energy, and financial development on consumption-based carbon emissions (comparative policy analysis for the G20 and European Union countries)

Recently, there has been a lot of focus on global trade and consumption-based carbon (CCO2) emissions. More research, however, has examined how financial development (FD) and international trade in renewable energy affect CO2 emissions. Furthermore, there are no distinct trends in the research about how globalization affects environmental quality. Our research analyzes and empirically investigates the relationship between CCO2 emissions and renewable energy, FD, and trade. A large panel of data from 41 G20 and European Union (EU) countries is assembled for empirical analysis from 1990 to 2019. The practical outcomes of panel quantile regression and feasible generalized least square (FGLS) approaches display that renewable energy and FD positively relate to CCO2 emissions; furthermore, trade to GDP hurts CCO2 emissions; market classification has been taken as a control variable which shows that the developed countries released more carbon than non-developed countries. These results suggest that the financial sector focuses more on supporting companies that use ecologically friendly techniques and pushing them to use other energy well-organized technologies in their production processes. As a result, CCO2 emissions will be reduced, preventing environmental damage at the non-renewable energy plant.

From COVID to conflict: Understanding the deriving forces of environment and implications for natural resources

In the contemporary world, the importance of natural resources is increasing day by day especially due to extraordinary circumstances, i.e., COVID-19 and global conflicts. The abundance of natural resource is considered competitive advantage and crucial for sustainable development. However, the role of natural resources can be questionable especially if its impact on the economy is negative. Sustainable use of natural resources is currently the biggest challenge for governance. Following these footprints, the study aims to revisit a novel perspective of natural resources in the context of global conflicts using data from Asian economies for the period of 1996-2020. In this pursuit, this study investigates how governance balances macroeconomic variables with sustainable development to account for effective climate change adaptation, mitigation efforts and integral to control conflicts. The second-generation test of CIPS and CADF are used to deal with cross-sectional dependence issues and Westerlund cointegration to estimate long-run relationships. Furthermore, the long-run coefficients are estimated by the PMG estimator using dynamic panel ARDL approach. The findings confirm that surpassing the threshold level of governance is essential to promote environmental quality and preservation of natural resources. The region needs to promote steward policy for resources. This can take the form of nationalizing resource assets, increasing taxes and royalties on resource extraction to ensure sustainable development. The handlers need to design polices supportive to renewable energy consumption, endorse IT based industry solution, encourage high-tech inward FDI, promote green financing and support sustainable development.

Carbon emission reduction effects of intellectual property institution construction in China

Institutions are the fundamental determinants of carbon emission performance. However, the environmental impact of intellectual property institution, especially its impact on carbon emissions, has been paid little attention. Therefore, the main purpose of this study is to assess the effect of intellectual property institution on carbon emission reduction, revealing a new solution to control carbon emissions. To achieve the goal, this study regards the National Intellectual Property Demonstration City (NIPDC) policy in China as a quasi-natural experiment of intellectual property institution construction and exploits the difference in difference approach to objectively evaluate the impact of intellectual property institution on carbon emission reduction based on the panel data of China's cities. The study draws the following important conclusions. First, compared with non-pilot cities, the NIPDC policy has reduced urban carbon emissions by 8.64% in pilot cities. In particular, the "carbon emission reduction dividend" of the NIPDC policy is in the long term but not in the short term. Second, the influence mechanism analysis shows that the NIPDC policy can promote carbon emission reduction by stimulating technology innovation, especially breakthrough innovation. Third, the space overflow analysis reveals that the NIPDC policy can mitigate carbon emissions in adjacent areas, resulting in obvious spatial radiation effect. Fourth, the heterogeneity analysis confirms that the carbon emission reduction effect of the NIPDC policy is more obvious in low administrative hierarchic cities, small and medium-sized cities, and western cities. As a result, Chinese policymakers should orderly promote the construction of NIPDCs, strengthen technology innovation, give full play to the spatial radiation role of NIPDCs, and optimize the role of government, so as to better release the carbon emission abatement effect of intellectual property institution.

The effect of income inequality and economic growth on carbon dioxide emission

Most of the developing and emerging countries are focusing to increase economic growth, enhance the living standard of the people, and reduce income inequality. Increasing economic growth through the factors such as agriculture, energy use for production, and other related activities can harm the environment. Considering this situation, this study utilizes data from the Belt and Road Initiative countries for the period of 1999 and 2018 to explore the nexus between income inequality, agricultural value added, and carbon dioxide using two-step system GMM model. The findings of the study indicate that income inequality, economic growth, energy consumption, and agriculture significantly contribute to an increase in carbon emissions and a decrease in environmental quality. On the other hand, the findings also indicate that manufacturing and service industries significantly contribute to an improvement in environmental quality by reducing carbon emissions. The findings lend even more credence to the environmental Kuznets curve, but the results do not indicate that there is a strong relationship between income inequality and economic growth. The outcomes of this study have crucial policy implications for the sample countries to build environmental regulations.

Evaluating the symmetric and asymmetric effects of fossil fuel energy consumption and international capital flows on environmental sustainability: a case of South Asia

South Asia is primarily affected by environmental degradation. As a result, it is worthwhile to explore the impact of international capital flows on the ecological sustainability of the South Asian region. There are many studies in the literature on the CO₂-remittances nexus, CO₂-FDI nexus, and CO₂-economic growth; however, no study has yet taken remittances and FDI into account in the symmetric and asymmetric model for the South Asian region. To address the research gap, this study investigates the effect of international capital flows, fossil fuel energy consumption, and economic growth on South Asian carbon emissions. This study examines the effect of fossil fuel energy consumption, remittances, foreign direct investment, and economic growth on the environmental sustainability of the South Asian region from 1975 to 2020. Autoregressive distributive lag (ARDL) and non-linear ARDL (NARDL) models are used to estimate the symmetrical and asymmetrical relationships among the variables. The findings of the ARDL models reveal that fossil fuel energy consumption and economic growth increase while remittances and FDI decrease carbon dioxide (CO₂) in the long run. According to the NARDL empirical findings, positive remittances and negative FDI shock reduce CO₂. Besides, the positive and negative fossil fuel energy consumption shock increases CO₂. Moreover, the positive (negative) economic growth shock increases (decreases) CO₂. The cumulative dynamic multipliers revealed the adjustment pattern to new long-run equilibria. The study recommends that policymakers regard remittances and FDI as policy instruments, particularly when developing long-term strategies and policies connected to environmental quality.

Exploring the nexus between energy consumption, income inequality and poverty, economic growth, and carbon dioxide emission: evidence from two step system generalized method of moments

The concern of environmental degradation, poverty, and income inequality remains a priority in achieving sustainable development goals. Countries are trying to reduce income inequality, alleviate poverty, and reduce environmental degradation which needs special attention. Consequently, this study explores the effect of income inequality, poverty, and energy consumption on carbon dioxide emission in the Belt and Road Initiative countries from 1996 to 2018. By employing the generalized method of moments, the findings show that income inequality, poverty, and energy consumption significantly increase carbon dioxide emission and lead to environmental degradation, while access to electricity significantly raises environmental quality. Economic growth positively affects carbon dioxide emission; however, the environmental Kuznets curve is valid. Income inequality exerts a moderating effect on carbon dioxide emission via per capita economic growth that reduces environmental degradation in the Belt and Road Initiative countries. The results of this study give important policy implications for the Belt and Road Initiative countries.

The nexus between natural resources, renewable energy consumption, economic growth, and carbon dioxide emission in BRI countries

This study investigates the nexus between natural resources, renewable energy consumption, economic growth, and carbon emission in 35 belt and road initiative (BRI) countries from 1985 to 2019. By employing OLS, fixed effect, generalized method of moments, and seemingly unrelated regression models, the results show that carbon dioxide and renewable energy are the driver factors of economic growth while natural resources reduce economic growth. The effect of economic growth and natural resources on carbon dioxide is positive; however, renewable energy consumption significantly reduces carbon emission. Economic growth rise renewable energy consumption while carbon dioxide and natural resources reduce it. The findings of this study have considerable policy implications for the belt and road countries that how natural resources and income inequality influence the interlinkage of renewable energy consumption, economic growth, and carbon dioxide emission.

Do renewable energy consumption and green innovation help to curb CO2 emissions? Evidence from E7 countries

Global climate change is profoundly affecting human survival and development and is a major challenge facing the international community today. Therefore, this study aims to examine the effect of renewable energy consumption and green innovation on CO2 emission reduction in E7 countries within the framework of macroeconomic indicators, and whether they can contribute to achieving carbon neutrality targets. To achieve the purpose of the study, firstly, the fully modified OLS, dynamic OLS, classical cointegration regression, Bayer-Hanck cointegration, and ARDL bounds test are employed in this study. The existence of a long-term cointegration or long-term linkage is confirmed by empirical evidence. Secondly, the empirical outcomes of FMOLS, DOLS, and CCR reveal that a 1% increase in renewable energy consumption and financial innovation reduces the CO2 emissions by 0.357% (0.301%), 0.428% (0.336%), and 0.348% (0.306%), while a 1% rise in economic growth and inflation raises the CO2 emissions by 0.881% (0.015%), 0.946% (0.043%), and 0.875 (0.022%), respectively. Similarly, the results of ARDL demonstrate that renewable energy consumption and financial innovation contribute to the improvement of environmental quality, while economic growth and inflation exacerbate the deterioration of environmental quality. However, green innovation has no apparent impact on environmental sustainability. Finally, in the short term, the paths of renewable energy consumption and economic growth on environmental sustainability under macroeconomic conditions are almost identical to those in the long term, while green innovation significantly improves the environmental quality of economic development in E7 countries. To sum up, to achieve sustainable economic and environmental development in the context of carbon neutrality, policy makers in developing countries should fully consider the role of renewable energy and green innovation, and actively strive to promote green and low-carbon energy development, to make new contributions to global environmental governance.

Impact of Public Environmental Concerns on the Digital Transformation of Heavily Polluting Enterprises

China is currently facing the arduous tasks of energy conservation, emission reduction and structural transformation, making it of great significance to study the digital transformation of heavily polluting enterprises. As an important informal regulatory system, public environmental concerns affect corporate environmental behavior by increasing external environmental pressure. This study uses the data of listed companies in China's heavily polluting industries from 2012 to 2020 and Baidu Index data to analyze how public environmental concerns affect the digital transformation of heavily polluting enterprises. This study finds that public environmental concerns can significantly promote the digital transformation of heavily polluting enterprises. For non-state-owned, green image and high-tech enterprises, the impact is even more obvious. Furthermore, based on the structural and hierarchical perspective of enterprise digital transformation, we find that public environmental concerns significantly promote digital technology application. This study puts forward some suggestions for government departments to formulate environmental protection regulations, enterprises to fulfill their green responsibilities and the public to participate in environmental governance.

The policy effect of green finance reform and innovations: Empirical evidence at the firm level

The Chinese central government established eight pilot zones in five provinces for green finance reform and innovations (GFRI) in 2017. The pilot zones promote green finance development and explore the propagable and reproducible experiences regarding mechanisms and institutions. Adopting a sample of China's listed companies from 2012 to 2021, this paper constructed a quasi-natural experiment and investigated the GFRI policy's effect on firms' total factor productivity (TFP) using the difference-in-differences (DID) method to verify the implementation effect of the GFRI policy. Furthermore, heterogeneity analysis and mechanism analysis were conducted to identify the guidance effect and deep mechanisms of the GFRI policy. The empirical results demonstrated that firms' TFP in pilot zones increased substantially after implementing the GFRI pilot policy, confirming that the policy had a strong incentive effect. The corresponding promoting effect was particularly significant for non-state-owned companies, the eastern and central regions, and firms in the growth stage. Further mechanism analysis revealed that the GFRI pilot policy can stimulated firms' TFP by promoting technological innovation and improving resource allocation efficiency. This paper's empirical findings are essential in improving relevant policies and expanding the pilot zones.

Capital Formation, Green Innovation, Renewable Energy Consumption and Environmental Quality: Do Environmental Regulations Matter?

The world economy continues to witness a steady rise in carbon emissions, which makes it challenging to fulfill the terms of the Paris agreement on reducing greenhouse gas emissions. In this context, countries worldwide enact environmental regulations to curtail environmental pollution to promote sustainable development. However, the importance of environmental regulations has not been fully validated in the previous literature. In addition, the concurrent roles of capital formation, green innovation, and renewability cannot be overlooked. Against this backdrop, this study selects data from G7 countries from 1994 to 2019 to explore the effect of environmental regulations, capital formation, green innovation, and renewable energy consumption on CO₂ emissions. In order to achieve the above research objectives, we employ the Method of Moments Quantile Regression (MM-QR) for empirical analysis. The results reveal that capital formation significantly enhances environmental quality by reducing CO₂ emissions across all quantiles (10th-90th). Environmental regulations show a significant and negative impact on CO₂ emission mainly at the middle and higher emissions quantiles, while the effect is insignificant at lower quantiles (10th). Moreover, green innovation and renewable energy consumption mitigate CO₂ emissions across all quantiles (10th-90th), while economic growth deteriorates environmental quality in G7 countries. The panel granger causality results indicate the unidirectional causality running from capital formation, environmental regulations, and renewable energy towards CO₂ emissions, which implies that any policy related to these variables will Granger cause CO₂ emissions but not the other way round. Based on the findings, important policy implications are proposed to promote sustainable development in G7 countries.

Exploring the moderating effect of globalization, financial development and environmental degradation nexus: a roadmap to sustainable development

Financial development is a multidimensional process that contributes to economic growth but sometimes it has a devastating effect on climate change. No country can achieve sustainable development goals without caring the environmental quality. The present study investigates the moderating role of globalization (KOF) in determining the financial development (FD) on environmental degradation in the SAARC countries from 1990 to 2020. The long-run coefficients are estimated using the panel quantile regression (PQR) approach at lower, middle and upper quantile groups. The study shows the U-shaped relationship across three quantile groups based on financial development and carbon emissions. The moderator globalization (KOF) brings up the change in the turning point and flattens before the maturity of the U-shaped curve at the middle quantile while flattens after the maturity of the U-shaped curve at the upper quantile. The study recommends that by using energy-efficient technologies, better financial sector interaction with globalization enhances the environmental quality in SAARC countries.

China's 2060 carbon-neutrality agenda: the nexus between energy consumption and environmental quality

This study examined the nexus between energy consumption and environmental quality in light of China's 2060 carbon-neutrality agenda utilizing annual frequency data from 1971 to 2018. In order to obtain valid and reliable outcomes, more robust econometric techniques were employed for the analysis. From the results, all the variables were first differenced stationary and cointegrated in the long-run. The elastic effects of the predictors on the explained variable were explored through the ARDL, FMOLS, and the DOLS techniques, and from the discoveries, energy utilization worsened environmental quality in the country via more CO2 emissions. Also, industrialization and urbanization deteriorated the country's environmental quality; however, technological innovations improved ecological quality in the nation. On the causal connections between the variables, a unidirectional causality from energy consumption to CO2 effluents was discovered. Also, feedback causalities between industrialization and CO2 secretions, and between urbanization and CO2 exudates were disclosed. However, there was no causality between technological innovations and CO2 emanations. Based on the findings, the study recommended among others that, since energy consumption pollutes the environment, the country should transition to the utilization of renewable energies. Also, the government should allocate more resources to the renewable energy sector. This will help increase the portion of clean energy in the country's total energy mix. Furthermore, research and development that are linked to the utilization of green energies should be supported by the government. Data constraints were the main limitation of this exploration. Therefore, in the future, if more data become available, similar explorations could be conducted to check the robustness of our study's outcomes.

Financial inclusion and environmental sustainability in Ghana: application of the dynamic ARDL estimator

Numerous explorations have been conducted on the determinants of Ghana's environmental quality. However, to the best of my knowledge, there has been no research on the connection between financial inclusion and environmental sustainability in the country. This study was therefore conducted to help fill that gap. In attaining the aforestated goal, econometric techniques that yield valid and reliable outcomes were engaged. From the results, all the series were first differenced stationary and cointegrated in the long run. The DARDL estimator with the support of the conventional ARDL estimator was adopted to explore the marginal effects of the predictors on the explained variable, and from the results, financial inclusion worsened environmental sustainability in the nation via high carbon emissions. Also, foreign direct investments degraded the country's ecological quality validating the pollution haven hypothesis. Finally, trade openness, population growth, and energy consumption were detrimental to environmental sustainability in the nation. On the causal directions amidst the series, unidirectional causalities from financial inclusion and trade openness to carbon effusions were disclosed. Also, feedback causalities between foreign direct investments and carbon emissions; between population growth and carbon effluents; and between energy consumption and carbon exudates were unfolded. The study recommended among others that, financial establishments should not fund the production of carbon-intensive goods, but those that are friendly to the environment. The government can also help to improve environmental sustainability by establishing regulations to mandate financial entities to engage in eco-friendly activities.

Revisiting the environmental impact of financial development on economic growth and carbon emissions: evidence from South Asian economies

It is a global challenge to achieve sustainable economic growth by improving the environment. The present study discussed the role of the financial development sector in achieving sustainable economic growth and environmental quality in South Asian countries from 1990 to 2020 by controlling labour force participation, globalization, industrialization, and the education sector. A feasible generalized least squares (FGLS) panel data econometric technique has been used to check the relationship among the variables. The results show that financial development has a U-shaped relationship with carbon emissions and economic growth. Furthermore, labour force participation, industrialization, globalization, and educational school enrolment significantly increase CO₂ and economic growth. This study suggests that the governments of South Asian countries should take steps to increase economic growth. For this purpose, effective supervisory mechanisms of financial development through financial innovation, improving financial efficiency, maintaining financial stability, and reducing the environmental pollution.

Examining the effect of information and communication technology, innovations, and renewable energy consumption on CO2 emission: evidence from BRICS countries

The increasing use of information and communication technology (ICT) in this digital era and its interlinkage with other economic and environmental factors have gotten considerable attention from researchers. ICT tools are considered very important in economic activities such as international trade, the financial sector, and foreign direct investment. ICT is also interlinked with innovation and energy consumption. However, ICT with these activities influences ecological footprint, especially in emerging economies such as BRICS (Brazil, Russia, India, China, and South Africa) countries. Therefore, this topic has got considerable attention from researchers and policy makers on the impact of ICT and economic growth activities on environmental quality. Consequently, this study investigates the impact of information and communication technology, renewable energy consumption and innovation on carbon dioxide emission in BRICS countries from 1990 to 2019 using cointegration, generalized least square, and panel corrected standard errors models. The findings show that two ICT indicators, mobile cellular subscription and fixed broadband subscription, negatively affect carbon emission along with economic growth and financial development. Innovation and renewable energy consumption also significantly reduce emission in presence of ICT indicators, while trade openness and fixed telephone subscriptions increase it. In the case of the ICT index model, all variables are positively associated with carbon emission except renewable energy consumption, however, the square and interaction term of all indicators significantly reduce carbon emission and evidence the environmental Kuznets curve hypothesis except trade openness. ICT growth should be considered in the energy sector, innovation, and financial development to enhance environmental quality. The findings of the study have considerable policy implications for the sample countries.

The role of innovations and renewable energy consumption in reducing environmental degradation in OECD countries: an investigation for Innovation Claudia Curve

Rising economic growth in recent ages is the primary concern of most of the countries to enhance the living standard, but the ever-increasing production of economic activities consumes a lot of energy, which leads to a sharp increase in carbon dioxide emissions. Innovation may be a remedy that can help improve energy efficiency, obtain renewable energy, and promote economic growth, thereby protecting the quality of the environment. Therefore, this paper examines the role of innovation and renewable energy consumption in CO2 reduction in OECD countries from 2004 to 2019. By using the two-step system generalized of moment estimator, the results show that economic growth and innovation significantly increase carbon emissions, however the innovation Claudia Curve (ICC) is verified, and the environmental Kuznets curve does not exist. Foreign direct investment has a negative impact on carbon emissions, thus verifying the Pollution Hao hypothesis, whereas renewable energy also improves environmental quality, but the interaction between innovation and renewable energy consumption still increases carbon emissions. Financial development, industrialization, trade, and energy consumption have also been found to be harmful factors of environmental quality. Our findings have considerable policy implications for OECD countries on the improvement of innovation indicators and investment in renewable energy sources to rise environmental quality.

Financial development, ecological transition, and economic growth in Sub-Saharan African countries: the performing role of the quality of institutions and human capital

Even though the ecological transition is considered the next big challenge for Africa, few studies have examined its scope regardless of the massive financing that is required and the stakes on other sectors. This study analyzes the links between financial development, ecological transition, and economic growth in Sub-Saharan Africa from 1980 to 2019. The Dumitrescu and Hurlin causality tests, Pedroni and Westerlund cointegration, and the Augmented Mean Group algorithm are applied on a sample of forty-eight countries. The findings support that institutional quality and human capital are crucial, but their effects can only be observed in high-income and upper middle-income countries. The level of economic development matters, and there is a threshold beyond which the effects of renewable energies and human capital occur on the performance of the financial system. Trade openness and investments seem also to be positive and significant on ecological transition only in these countries. Furthermore, there is substitutability between non-renewable and renewable energy consumption in these countries, while in lower middle-income and low-income countries, there is complementarity. The study concludes by highlighting key policy recommendations to sustain ecological transition.

The role of institutional quality in FDI inflows and carbon emission reduction: evidence from the global developing and belt road initiative countries

Achieving economic growth is the primary concern mostly of every country to enhance living standard; however, an increase in economic activities may have environmental consequences. Foreign direct investment is also considered a driver of economic growth while it affects the quality of environment. The role of institutions can be useful to enhance foreign direct investment (FDI) inflow which can in turn increase economic growth and safeguard environmental quality. Based on the ongoing debate, this study attempts whether the quality of institutions plays any role in FDI inflow and in enhancement of environmental quality. For this purpose, this study examines the role of institutional quality in FDI inflows and carbon emission reduction in the global panel, 107 world developing, and 39 Belt and Road Initiative countries for the period of 2002-2019. By using both static and dynamic panel models, the results indicate that governance indicators are important for FDI inflows, but this impact varies in different panels. Overall, institutional quality has a significant and positive impact on foreign direct investment inflow, while energy use reduces it in all panels. Economic growth positively associated with carbon emission, while the square of GDP evidences the environmental Kuznets curve. FDI and trade increase global and developing countries' emissions, while reducing emission in Belt and Road countries. Institutional quality along individual indicators, political stability, rule of law, and regulatory quality are found to be poor governance indicators in all panels, while voice and accountability and control of corruption are weak indicators in Belt and Road countries; however, the interaction term proves that the quality of institutions is regulated by financial development and FDI in carbon emission reduction in all panels. This study has considerable policy significance for countries to carry out strong policy reforms to increase green FDI and improve environmental quality.