The role of financial inclusion and tourism in tackling environmental challenges of industrialization and energy consumption: Redesigning Sustainable Development Goals policies

Abstract

AbstractThe Next 11 (N‐11) countries are facing many challenges in achieving the objectives of Sustainable Development Goals (SDGs), as preserving environmental quality has become a major challenge for them. Specifically, achieving SDG 3, SDG 7, SDG 9, and SDG 13, the current research scrutinizes the influence of industrialization, tourism, and renewable and fossil fuel energy consumption with the moderating role of financial development on the ecological footprint in the N‐11 countries during 1995–2018. By testing all nine hypotheses through the augmented mean group, common correlated effects mean group estimators, and the Dumitrescu and Hurlin causality approach, various interesting findings are discovered. The findings verified that industrialization, tourism, and non‐renewable energy play major roles in driving environmental pollution. However, renewables and financial development increase environmental quality. Moreover, the interacting role of financial expansion with industrialization and non‐renewables significantly deteriorates the environment. In contrast, the moderating role of financial development with tourism and renewable energy protects environmental excellence. In addition, the growth hypothesis is discovered from tourism and renewables to ecological footprint, and the feedback hypothesis is discovered between industrialization, financial development, and ecological footprint. Following the empirical findings, we recommend several policy implications to address the objectives of SDG 3, SDG 7, SDG 9, and SDG 13.