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This research investigates the dynamic effects of stock markets, economic globalization, and financial development on environmental quality. We used the annual panel data of Southern Common Market (MERCOSUR economies) covering the period 1990 to 2016. Through updated econometric methodologies, first, we substantiated cross-sectional dependency, stationary level, and panel cointegration among scrutinized variables, which is purely done for reliable findings. After that, we deployed the Generalized Method of Moment (GMM) approach to get vigorous elasticities of all the specified regressors. Elasticities of GDP and its square corroborate that the environmental Kuznets curve exists between income level and carbon emission. Empirical verdicts postulate that the development of stock markets and energy ingestion accelerate to air pollution by assisting carbon dioxide emissions while economic globalization and financial sectors are playing a pivotal role in augmenting the environmental quality of the MERCOSUR economies. Economic globalization and financial development have a significant negative influence on CO2 emission. The Pooled Mean Group (PMG) estimator robust our findings and provide the speed of adjustment (54.5022%). Moreover, Dumitrescu-Hurlin Panel Causality (DHPC) test depicts that economic globalization, financial sectors, energy use, and real income significantly cause carbon emissions in the case of MERCOSUR economies. In the end, the authors have proposed some policy implications to legislators and policymakers.

Global warming and greenhouse gas emissions have become a severe threat to our ecosystem. Prior studies on environment posit that ample exhaustion of fossil fuels for energy is one of the fundamental causes of environmental degradation and naturally replenished energy sources are affordable over fossil fuels. This study set out to examine the role of financial sectors and globalization (in the presence of energy and renewable energy consumption) for a sustainable environment in the panel of Central and Eastern European (CEE) countries in One Belt and One Road initiative perspective. The current study uses annual data of 16 CEE countries covering the period of 1980 to 2016. After confirmation of cross-sectional dependency and co-integration among variables, we applied the Dynamic Seemingly Unrelated Regression and Dumitrescu–Hurlin causality approach for long-run estimations and to check the causal relationship, respectively. The empirical findings of the study certify the existence of an environmental Kuznets curve for the selected panel countries. Globalization is enhancing the environmental quality of the CEE economies. It is important to note that energy consumption and renewable energy consumption have a positive and statistically significant whack on carbon emission. In addition, we do not find a significant link between financial development and carbon emission. Granger casualty test confirms a two-way causal relationship between economic growth and carbon emission, globalization and environmental degradation, globalization and renewable energy consumption, economic growth and renewable energy consumption, and between financial development and energy consumption. Moreover, we found one-way causality from energy consumption (renewable and non-renewable) to carbon emissions. Based on the findings, a number of appropriate policy suggestions are presented in the perspective of Central and Eastern European Countries.