Natural resources extraction, financial expansion and remittances: South Asian economies perspective of sustainable development

Abstract

Sustainable environment is identified as a key source of sustainable development. In the recent COP27, climate change has been identified as a global challenge; a global strategy is required to tackle this issue. Since the issue is more common in south Asian economies, this research assesses the nexus of natural resources extraction, economic expansion, financial expansion, and personal remittance with carbon emissions from 1988 to 2021. This study used several panel estimation approaches to confirm cross-sectional dependence and the long-term relationship between the study variables. As a consequence of the data's non-linear distribution, this research utilizes method of moment quantile regression (non-parametric) approach for the long-run coefficient analysis. The outcomes emphasized that economic expansion is a key driver of environmental degradation. Natural resources extraction significantly aggravates environmental situation, whereas financial expansion and personal remittances significantly and negatively affect the carbon emissions in the study area. The estimates are robust by employing another non-parametric (quantile regression) approach. This study suggests improved financial development and proper channelization of remittances to attain environmental sustainability.