Understanding the nexus between fintech, natural resources, green investment, and environmental sustainability in China: A DYNARDL approach

Abstract

China is one of the world's biggest polluters and emitters of Carbon diaoxide Emissions (CO2). The recent environmental issues suggest the issues they are facing in light of the increasing level of floods and storms. The impact of the environmental calamities has reached the level that it is causing serious damage to the food security of the country. Despite the advances made in the development of renewable energy capacity, the natural calamities continue to rise. This study identified the role of Fintech (FNT), Natural Resources (NTR), and Green Investment (GINV) on Environmental Sustainability (ENS). Using the DYNARDL approach, the findings of the study suggest that FNT and GINV can be a useful tool in achieving ENS. In contrast, the continued use of NTR can cause some serious damage towards ENS targets for China. The study recommends the adoption of carbon taxes for its industries to force the transition towards green energy and sustainable practices. The extra cost associated with carbon taxes would ensure that firms would now invest heavily in the renewable energy sector, which would be essential for the transition towards the renewable energy sector. Furthermore, using FNT to promote green growth is also an important recommendation. The use of crowdfunding and the development of a green finance market can be some of the ways China could achieve ENS in the long run.