Renewable Energy Consumption, Financial Inclusion and Fintech as Drivers of Environmental Quality: The Moderating Role of Green Finance in selected South Asian Economies
Abstract
Environmental challenges require innovative, inclusive, nature-based, and financial solutions. In this regard, renewable energy consumption, financial inclusion, fintech and green finance bring greater opportunities for mitigating CO2 emissions. Previous studies have identified numerous determinants of environmental quality including renewable energy consumption, financial inclusion and fintech. However, their combined impact on environmental quality remains underexplored. This is a novel study which has examined the moderating role of green finance in the relationship between fintech and environmental quality. Therefore, the current study examines the impact of renewable energy consumption, financial inclusion and fintech on environmental quality. While the interaction of green finance between fintech and environmental quality has also investigated. Data from selected South Asian countries (Bangladesh, Bhutan, India, Pakistan, Afghanistan Maldives and Nepal) for the period 2004–2024 has collected. The findings of CS-ARDL Model shows that renewable energy consumption, fintech and foreign direct investment reduced Co2 emission and enhanced the environmental quality both in short run and in long run. While financial inclusion and green finance enhanced co2 emission and declined the environmental quality in both long run and short run. Moreover, green finance positively moderates the relationship between fintech and environmental quality and declined the environmental quality in both long run and short run. The study has important implications for the government, policymakers, academics and financial institutions in making strategies for mitigating CO2 emissions. The government can spend its budget on green finance for bringing the environmental quality. Keywords: Fintech, financial inclusion, green finance, renewable energy consumption, environmental quality.