Examining the role of financial inclusion towards CO2 emissions: presenting the role of renewable energy and globalization in the context of EKC

To achieve sustainable development, the role of financial inclusion has been discussed in limited studies. Therefore, this work aims to investigate the impacts of financial inclusion, renewable energy, globalization, and economic growth on carbon dioxide emissions in the context of environmental Kuznets curve. The annual data of 1990-2017 is analyzed by employing second-generation methods. Westerlund test confirm the long-run association among the panel data. Cross-sectional auto-regressive distributive lag approach has been applied because this method considers the cross-sectional dependence among the panel data to provide robust results. The findings show that financial inclusion is increasing carbon dioxide emissions. This means that financial inclusion requires to integrate it with greener environmental policies. Renewable energy is helpful in mitigating the carbon dioxide emissions but globalization and economic growth are increasing carbon dioxide emissions. On the base of the findings, it is recommended that Pakistan, India, Bangladesh, and Sri Lanka need to revise their international trade policies to reduce carbon dioxide emissions.

Automated summary

Financial inclusion has a positive impact on carbon dioxide emissions, but needs to be integrated with environmental policies; Renewable energy helps reduce carbon emissions, while globalization and economic growth increase carbon emissions.