Abstract
This study analyzes the causal connection between financial inclusion and carbon emission in selected South Asian countries through a quantile technique–based linear Granger and non-parametric causality test. The analysis of the study covers quarterly data from 1980 Q1 to 2019 Q4. However, the linear Granger causality assessment outcome does not indicate any causal relationship between financial inclusion and carbon emission. In contrast, results from non-parametric assessment reveal a non-linear connection between the variables. The non-parametric test results of the South Asian countries exhibit that financial inclusion leads to carbon emission, which instigates the deterioration of the environment, except for Bhutan. Subsequently, creating awareness by promoting renewable energy resources is essential while investing in fuel-efficient technology to reduce the dependence on fossil fuels. The results of this study provide significant information to the governments and policymakers in emerging countries to improve financial literacy among people to reduce the risk of global warming by encouraging investment in energy-efficient resources.
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Data availability
The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Notes
FIN- financial inclusion, SEN-sustainable environment, CEM- carbon emission.
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Funding
1. System Science and Enterprise Development Research Center of Sichuan University (Xq22B10)
2. Soft Science Project of Sichuan Provincial Department of Science and Technology (2022JDR0150)
3. Soft Science Project of Chengdu Science and Technology Bureau (2021-RK00-00082-ZF)
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Li Jingpeng: conceptualization, writing — original draft, writing — review and editing, methodology, formal analysis. Asad Ullah* (corresponding author): conceptualization, writing — original draft, writing — review and editing, data curation, methodology, formal analysis. Syed Ali Raza: writing — original draft, writing — review and editing, supervision. Maiyra Ahmed: writing — original draft, writing — review and editing, data curation.
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Jingpeng, L., Ullah, A., Raza, S.A. et al. Nonlinear and nonparametric causal relationship between financial inclusion and sustainable environment in South Asia. Environ Sci Pollut Res 30, 2218–2232 (2023). https://doi.org/10.1007/s11356-022-22301-8
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DOI: https://doi.org/10.1007/s11356-022-22301-8