How do environmental technologies affect environmental degradation? Analyzing the direct and indirect impact of financial innovations and economic globalization

Abstract

Technology has long been recognized for driving long-term gains in economic prosperity. However, the role of various technologies, i.e., environmental and financial technologies, for environmental degradation is not yet clear. The on-hand study revealed the direct and indirect impact of financial innovations and economic globalization on environmental degradation in China. Moreover, the contribution of ecological technologies to environmental degradation is also captured in this study. The investigation’s findings publicized that financial innovation directly impacts environmental degradation in China; however, it also indirectly affects the environmental degradation through economic globalization, implying that policies regarding economic globalization would also impact environmental quality in China. Moreover, economic globalization indicated direct and indirect impacts on environmental degradation through environmental technologies. Additionally, the study stated that environmental technologies in China harm environmental quality. The study found a significant and inverted U-shaped affiliation between GDP and ecological footprints. The study elaborated the imperious policies to gain sustainable development without harming environmental sustainability. Granger causality test enlightened the bidirectional feedback between financial innovations and environmental degradation.