Financial inclusion empowering sustainable technologies: Insights into the E-7 economies from COP28 perspectives

Abstract

COP28 highlighted the essential interplay between financial inclusion and sustainable technologies in driving effective climate action. This strategy underscores the importance of aligning financial systems with technological innovations to mitigate environmental pollution and achieve net-zero carbon emissions. The limited availability of funds, however, continues to hinder growth and widespread adaptation of technological advancement, and a significant research gap pertaining to the financial inclusion still remains. In order to address this gap; this study investigates the role of financial inclusion and technological advancement in the context of environmental pollution for the E-7 countries. In this regard, the results of the cointegration analyses show evidence of long-term relationships between TA, Financial inclusion, and environmental degradation. Moreover, the results of our study also show that financial inclusion positively influences carbon emissions. However, financial inclusion is a substantive moderator that tends to intensify the negative association between TA and CO2 emissions. In addition to this, our results also show that energy productivity and technological advancement significantly reduce CO2 emissions and enhance the quality of the environment. Our study also uncovers the positive correlations between GDP, trade openness and carbon emissions, thus signaling towards their adverse effect on the environment.