How do financial inclusion and renewable energy collaborate with Environmental quality? Evidence for top ten countries in technological advancement

The environmental situation of our planet is seriously degraded due to the massive spread of greenhouse gases. Several aspects can influence the quality of the environment. The present study debates the effect of financial inclusion (FI) and renewable energy consumption (REC) on the emissions of carbon dioxide (CO2) emissions of the top ten countries in technological advancement (TTCTA) over the period 2004-2019. Other deterministic factors are included in the empirical study such as real gross domestic product (GDP), non-renewable energy consumption (NREC), and technological advancement (ATECH) to check their influence on environmental indicators. PMG-ARDL approach, cointegration techniques, and Granger causality tests are applied for the empirics part. In the long run, the outcomes show that real GDP, REC, and technological advancement contribute to decreasing CO2 emissions, while NREC and FI contribute to increasing emissions levels. In the short run, only GDP and NREC significantly deteriorate the environmental quality. Granger shows a long-run bidirectional causality between CO2 emissions, economic growth, REC, NREC, and ATECH.

Automated summary

The environmental situation is seriously degraded due to the spread of greenhouse gases. This study examines the impact of financial inclusion and renewable energy consumption on CO2 emissions, taking into account other factors. The results show that real GDP, renewable energy consumption, and technological advancement contribute to reducing CO2 emissions, while non-renewable energy consumption and financial inclusion contribute to increasing emissions levels.