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The threat posed by climate change has become a reality in the public sphere. This research looks at how financial inclusion affects carbon dioxide emissions in Sub-Saharan Africa (SSA) countries from 2004 to 2017. The panel autoregressive distributed lag and panel granger causality approaches are used to determine if financial inclusion reduces CO2 emissions in Sub-Saharan African countries. The PARDL results demonstrated that, over time, financial inclusion, GDP per capita, industrialization, and trade openness have a substantial beneficial influence on carbon emissions in SSA countries. The result suggests that these considered variables contribute significantly to CO2 emissions while urbanization and energy intensity reduce CO2 emissions in SSA. Financial inclusion and other control variables have no significant impacts on carbon emission in SSA in the short run. The findings of the granger causality test further confirm the direction of causality, revealing that financial inclusion, GDP per capita, industrialization, energy intensity, and trade openness, granger cause carbon emission in SSA countries. Meanwhile, carbon emission does not granger cause any of the considered factors. The study concludes that financial inclusion increases carbon emission in SSA countries, given the poor state of financial inclusion. Our findings advocate for a policy framework that would focus efforts on connecting financial inclusion measures with environmental legislation across SSA nations.

The study was motivated by increased carbon emissions and high inequality in many of the countries in sub-Saharan Africa (SSA). In this study, we examine whether income inequality in SSA countries increases CO2 emissions, and also investigate empirically whether financial inclusion and institutional quality moderate this connection from the period 2000–2018. For the purpose of examining these links, two proxies for financial inclusion (FI) and an index of institutional quality (IQX) are used. Advanced econometric techniques such as cross-sectional augmented autoregressive distributed lags (CS-ARDL) and augmented mean group (AMG) techniques were used to account for robust, cross-sectional dependence and heterogeneity. The CD-ARDL results demonstrate that the inequalities in the short and long runs are essentially positive, indicating that environmental pollution would rise progressively as the wealth difference widened in the 32 selected SSA nations. The square of income disparity has a negative impact on CO2 emissions, albeit the magnitude varies in the short and long run. Income disparity continues to have a positive impact on CO2 emissions after interacting with financial inclusion in both the short and long run. The results of the interaction term (INEQ*IQX) show that institutional quality has a considerable negative effect on CO2, implying that institutional quality has a major impact on the inequality-CO2 nexus. The robustness of the models is tested using AMG, and the results are congruent with the CS-ARDL estimated results. Hence, based on our findings, we recommend several measures to reduce CO2 emissions in SSA countries. [ABSTRACT FROM AUTHOR]

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The threat posed by climate change has become a reality in the public sphere. This research looks at how financial inclusion affects carbon dioxide emissions in Sub-Saharan Africa (SSA) countries from 2004 to 2017. The panel autoregressive distributed lag and panel granger causality approaches are used to determine if financial inclusion reduces CO2 emissions in Sub-Saharan African countries. The PARDL results demonstrated that, over time, financial inclusion, GDP per capita, industrialization, and trade openness have a substantial beneficial influence on carbon emissions in SSA countries. The result suggests that these considered variables contribute significantly to CO2 emissions while urbanization and energy intensity reduce CO2 emissions in SSA. Financial inclusion and other control variables have no significant impacts on carbon emission in SSA in the short run. The findings of the granger causality test further confirm the direction of causality, revealing that financial inclusion, GDP per capita, industrialization, energy intensity, and trade openness, granger cause carbon emission in SSA countries. Meanwhile, carbon emission does not granger cause any of the considered factors. The study concludes that financial inclusion increases carbon emission in SSA countries, given the poor state of financial inclusion. Our findings advocate for a policy framework that would focus efforts on connecting financial inclusion measures with environmental legislation across SSA nations. [ABSTRACT FROM AUTHOR]

Carbon dioxide emissions and income disparity have become crucial unclear challenges threatening the environment and humanity over the past three decades. Erstwhile environment studies have claimed that greater energy use contributes to poor environmental quality but ignored the significance of financial development in mediating with income inequality on carbon dioxide or environmental quality. Our study employed both panel autoregressive distributed lag model (ARDL) and causality tests to investigate whether income inequality impacts CO2 emissions and how the interaction between income inequality and financial development impacts CO2 emissions in sub-Saharan Africa (SSA) countries from 2004–2019. The findings revealed that financial development and all other control variables except trade/GDP ratio positively impact carbon emission in SSA in the long run. The result shows that the trade/GDP ratio is contrariwise related to carbon emission in SSA. In the short run, all the control variables, income inequality, population density, financial development trade to GDP, energy consumption, per capita income and urbanization, are not statistically significant. In contrast, per capita income, population density and urbanization have an inverse relationship with carbon emission in SSA. The analysis of the interaction between income inequality and financial development on carbon emission revealed that financial development plays a significant role as a moderator in increasing carbon emission coming from income inequality. The study concludes that financial development plays a significant role as a moderator in increasing carbon emissions coming from income inequality. As such, the governments of these SSA nations and other stakeholders should work to combine economic disparity and financial instability to prevent harm to the environment by cutting carbon emissions. [ABSTRACT FROM AUTHOR]