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Article

Nexus between Financial Development, Renewable Energy Consumption, Technological Innovations and CO2 Emissions: The Case of India

1
School of Economics, Hainan University, Haikou 570228, China
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School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
3
School of Life and Pharmaceutical Sciences, Hainan University, Haikou 570228, China
4
School of International Economics and Trade, Central University of Finance and Economics, Beijing 102206, China
*
Authors to whom correspondence should be addressed.
Academic Editors: Beñat Landeta and German Arana
Energies 2021, 14(15), 4505; https://doi.org/10.3390/en14154505
Received: 15 June 2021 / Revised: 15 July 2021 / Accepted: 15 July 2021 / Published: 26 July 2021
Concerns regarding environmental sustainability have generally been an important element in achieving long-term development objectives. However, developing countries struggle to deal with these concerns, which all require specific treatment. As a result, this study explores the interaction between financial development, renewable energy consumption, technological innovations, and CO2 emissions in India from 1980 to 2019, taking into account the critical role of economic progress and urbanization. The Autoregressive Distributed Lag (ARDL) model is used to quantify long-run dynamics, while the Vector Error Correction Model is used to identify causal direction (VECM). According to the study’s conclusions, financial development has a considerable positive impact on CO2 emissions. The coefficient of renewable energy consumption and technical innovations, on the other hand, is strongly negative in both the short and long run, indicating that increasing these measures will reduce CO2 emissions. Furthermore, economic expansion and urbanization have a negative impact on environmental quality since they emit a significant amount of CO2 into the atmosphere. The results of the robustness checks were obtained using the Fully Modified Ordinary Least Squares (FMOLS), the Dynamic Ordinary Least Squares (DOLS), and the Canonical Cointegration Regression (CCR) approaches to verify the findings. The VECM results reveal that there is long-run causality in CO2 emissions, financial development, renewable energy utilization, and urbanization. A range of diagnostic tests were also used to confirm the validity and reliability. This study delivers new findings that contribute to the existing literature and may be of particular interest to the country’s policymakers in light of the financial system and its role in environmental issues. View Full-Text
Keywords: financial development; renewable energy; technological innovations; CO2 emissions; ARDL; India financial development; renewable energy; technological innovations; CO2 emissions; ARDL; India
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MDPI and ACS Style

Qayyum, M.; Ali, M.; Nizamani, M.M.; Li, S.; Yu, Y.; Jahanger, A. Nexus between Financial Development, Renewable Energy Consumption, Technological Innovations and CO2 Emissions: The Case of India. Energies 2021, 14, 4505. https://doi.org/10.3390/en14154505

AMA Style

Qayyum M, Ali M, Nizamani MM, Li S, Yu Y, Jahanger A. Nexus between Financial Development, Renewable Energy Consumption, Technological Innovations and CO2 Emissions: The Case of India. Energies. 2021; 14(15):4505. https://doi.org/10.3390/en14154505

Chicago/Turabian Style

Qayyum, Muhammad, Minhaj Ali, Mir M. Nizamani, Shijie Li, Yuyuan Yu, and Atif Jahanger. 2021. "Nexus between Financial Development, Renewable Energy Consumption, Technological Innovations and CO2 Emissions: The Case of India" Energies 14, no. 15: 4505. https://doi.org/10.3390/en14154505

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