Clean energy investment, Fintech and financial development as determinants of environmental sustainability in Asian region

Abstract

This study explores the significant impact of clean energy investments and Fintech on reducing carbon emissions in selected Asian countries. By examining the relationship between clean energy investments and environmental degradation along with other variables such as economic growth, Fintech, information technology, resource rents, financial development, and corruption. Utilizing panel data from ten emerging economies in South, Southeast and East Asia from 2000 to 2022, the study employs the Cross-sectional Autoregressive Distributed Lag (CS-ARDL) technique to analyze both short-run and long-run effects. The results show that economic growth and resource rents are positive towards carbon dioxide emissions and not beneficial for the environment. Conversely, clean energy investments, along with Fintech are found to be negative towards carbon dioxide emissions, significantly mitigating environmental risks. Further, financial development and information technology significantly mitigate carbon dioxide emissions and protect environmental efficiency. However, the influence of corruption practices is marginal in the long term but contributes positively to environmental degradation in the short term, posing a concern for these emerging economies. In conclusion, the study offers vital recommendations for achieving environmental sustainability and overcoming the facade of green efforts. These include the efficient use of green or renewable resources within Fintech projects, promoting green financing, and initiating clean energy measures. Such steps are essential to foster environmental sustainability.