How do financial inclusion and fintech impact environmental sustainability in countries committed to net-zero carbon emissions?

Abstract

Nowadays, the phrase "Sustainable development" is seen as a major worry for people worldwide, bringing up the question of how to guarantee that sustainable environmental development and sustainable economic development are closely related. Through the reduction of CO2 emissions and ecological footprints in 106 countries that have committed to net-zero emissions, the study looks at how financial inclusion and Fintech tools affect sustainable environmental development, according to the ECIU. The study discovered the detrimental effects of Fintech and Financial Inclusion on CO2 emissions and the environmental footprint by employing the GMM estimate method. The study also demonstrates how Fintech can improve the effectiveness of Financial Inclusion, which in turn boosts efforts to lessen the ecological footprint and CO2 emissions' negative effects on the environment. Separating the nations into two categories high-income countries and middle- and low-income countries also helped to carry out the research findings. Furthermore, the results were tested for robustness by replacing the measurement method for environmental variables, such as PCA of variables leading to environmental degradation and temperature change variable. Based on the research results obtained, the authors' group proposes policy implications as well as recommendations for improving sustainable environments through technical reforms related to financial variables, aiming towards a "green world" in the future.