Global warming has become a major global issue (J. Yang et al., 2019). Temperatures at the Earth's surface and in the ambient air are reaching higher and more intense levels more frequently than in the past (Lebkowski, 2019). GHG is the primary cause of global warming and air pollution. Increasing conveyance volumes have a more significant detrimental effect on the quality of the environment. One of these effects is the air pollution problem induced by the combustion of fossil fuels, agricultural activities, industrial and factory exhaust, and other activities (Knez et al., 2014). They are emitted by numerous human activities, such as industrial and transportation activities (Sinha et al., 2020).
After an evident decrease in CH4 emissions during the 1990s, anthropogenic CH4 emissions have risen again (Bousquet et al., 2006). Between 1979 and 2004, the N2O concentration increased linearly (Kandel et al., 2019). Additionally, livestock contributes to the increase in GHG emissions. Although the dynamic contrast of climate interactions is not fully understood, there is widespread scientific agreement that human activities contribute to global climate change. 2001, Houghton et al. Since the U.N.'s MDGs were established in 2000, economies have focused on regulating GHG emissions regardless of their development status. Because industrialized nations and countries with an industrial orientation impact the environment, they must regulate their emissions. Subsequently, the inauguration of SDGs 2015, however, world-leading agencies and the U.N., more member states, observed a concentrated and attentive approach to environmental purification and protection (Schaeffer et al., 2015; Skrúcanỳ et al., 2019). They have analyzed the diverse policy implications and their impacts on European nations. They demonstrated that prudent sustainability requires policies regardless of the state's level of development.
Other research (Sinha et al., 2020) assessed technology's influence and government initiatives on GHGs in the environment of a minor sample of Asian and African economies. They determined that nations have focused more on their sustainability and SDG achievement policy mechanisms. Since the inauguration of the SDGs, academics have evaluated the state policy implications of a concentrated approach and suggested various policy implications for achieving all SDGs through optimal state resource utilization (Pezzagno et al., 2020). Global climate change's predicted and observed effects include rising sea levels (Shepherd & Wingham, 2007), rainfall distribution changes, and storm intensification (AR4 IPCC Climate Change, 2007). and an accelerated rate of species extinction. Current strategies for combating global warming fall into two broad groups: (1) reducing fossil fuel combustion and other GHG emissions and (2) increasing carbon sequestration (Grady et al., 2001). However, some authors have also identified financial vulnerability as crucial in determining sustainable development. Theoretically, Because of the information asymmetry it creates, financial instability can reduce environmental quality, making it difficult for financial institutions to fund renewable energy projects. Similarly, FDI flows are harmed by financial sector instability (FDI), which impedes the introduction of environmental innovations into the economy, thereby degrading environmental quality (Baloch et al., 2022; B. Yang et al., 2022).
Explore the numerous facets of financial risk and its implications for businesses, governments, markets, and people. Financial stability is vital for economic development and impacts environmental quality (Lee; Chiu 2013; Shahbaz 2022). First, a more secure financial environment supported by robust financial institutions may entice more FDI, resulting in higher economic growth., increasing energy consumption. (Lee; Chiu 2013; Shahbaz 2022.)
To begin, green structural transformation necessitates substantial expenditures in high-capital-cost areas like Innovation and clean power (Lindenberg, 2014). These industries are very susceptible to uncertainty and risk. Low-carbon energy sources, such as renewables, would require investment if green transition scenarios are to be met quadrupled, creating a "green finance gap (Bui, 2020). On the other hand, the study uses long-term equilibrium to examine the connection between carbon emissions, economic growth, and energy use. The study found that rising GDP directly increases CO2 emissions and energy demand, worsening India's already poor climate. (Boutabba, 2014). In other words, insufficient financial resources for green investments threaten the financial system's stability. Moreover, investing practices, accounting systems, and financial regulatory regimes are being shown to have an intrinsic “carbon bias" (Campiglio, 2016). Besides, this study showed that F.R. does not affect emissions (Ozturk & Acaravci, 2016). Studies have revealed that climate-improvement efforts may have an unanticipated effect on the financial system's stability (Battiston et al., 2017; Dietz et al., 2016; D’Orazio & Popoyan, 2019)., Examined the non-linear impact of financial Risk on CO2 emissions using the penal smooth transition regression model, and the results showed a negative impact between Financial Risk and CO2 emissions. Furthermore, the studies found the same results (Shahbaz et al., 2017) and (Abbasi & Riaz, 2016) and (Zaidi et al., 2019a). Boutabba's finding was revised and confirmed by (Bui, 2020) and (Fang et al., 2020).
Financial development considerably reduces both long- and short-term carbon emissions, according to an analysis of panel data covering APEC nations from 1990 to 2016 (Zaidi et al., 2019b). Meanwhile, the Umar study discovered a persistent inverse relationship between CO2 emissions and China's economic growth (Umar et al., 2020). Mberak testified that financial development adversely influences carbon emissions over the long run, showing that economic growth reduces environmental damage (Kais ,2017). Previous study findings were consistent with those (Kirikkaleli & Adebayo, 2021). Report negative interrelationship between Financials risk and Carbon dioxide emission. On the other side, other studies showed that F.R. worsened CO2 emissions. For example, the study by (Zhao et al., 2021). These emissions endanger human existence. Therefore, decreasing carbon emissions to prevent The occurrence of natural disasters on a worldwide scale has priority (Acosta et al., 2020).
As opposed to sustainability, green growth promotes ecologically sustainable growth without lowering the fiscal growth rate. As a result, green growth is regarded as a successful low-carbon framework and a viable road toward sustainable development ( G20 2019; UN. et al., 2012). Because green growth comprises both short-term economic growth and long-term environmental sustainability, multi-sectoral activities are required the consolidation of new resources through investment and innovation while stimulating economic growth (Huang & Quibria, 2013; OECD: Green Growth 2022). To that aim, green growth, defined as an alternative growth route requiring policy instruments such as fiscal and monetary policies, has emerged as a critical issue for the international community, spurring significant research into its causes (Jason Hickel 2019; Kim et al., 2014; Zhao, Shahbaz, et al., 2022). The need to find the best technique and resources to solve ecological problems without sacrificing economic growth is pressing considering their increase. A shift from a resource-based to a renewable energy-based model of economic growth is necessary. Two goals are possible means of doing this: Achieving macroeconomic stability is critical for economic growth, and green development requires minimizing environmental damage and increasing resource use efficiency (Y. Chen et al., 2023).
In addition, technological advancements, an increase in the financial risk index, and craft contribute to China's economic expansion. We also discover that investment and technological innovation improvement can significantly impact a nation's economic performance. Finally, we observe a negative correlation between financial risk and China's economic performance (Xu & Zhao, 2023). The results show that environment-related technologies contribute to green growth in BRICS nations, confirming the high optimism of long-term forecasts of environmental inventions and patents. Green growth in the BRICS nations is expected to expand as financial globalization develops (R. Chen et al., 2023).
A rise in global temperature and a slew of unfavorable environmental conditions are directly attributable to the growing rate of industrialization throughout the world and the overexploitation of non-renewable energy sources (Mohsin et al., 2021). In addition, worldwide emissions of greenhouse gases are anticipated to increase by 50 percent by 2050, primarily due to CO2 emissions from non-renewable energy sources (Spirito et al., 2014). The average atmospheric CO2 concentration and surface and ocean temperatures worldwide will continue to rise unless effective policies and technologies are implemented to cut or manage CO2 emissions. The rising global temperature has already caused significant damage to the human living environment due to these greenhouse gases. This includes the possible extinction of some species, the loss of biodiversity, droughts, floods, forest fires, acidification of the oceans, the melting of the south and north pole glaciers (NSPG), and sea-level rise (Jahangir et al., 2022). The effects of pollution by providing subsidized loans to businesses and industries that adhere to environmental regulations. This practice separates economic growth and CO2 emissions, facilitating renewable energy projects' deployment (Baloch et al., 2022; Bo et al., 2022; Juyal et al., 2010).
The effect of technological advancement on economic growth. According to a study, the quantity and quality of innovative activity are related to economic growth (Hasan & Tucci, 2010). An additional study affirms that growth relies on accessible energy, with a strong correlation between energy consumption and output. Progress in technology and better fuel options have overcome previous constraints on economic productivity due to inadequate energy resources. Nonetheless, the significance of energy remains unchanged. In developed and select developing countries, advancements in technology and a shift from coal to superior fuels, especially electricity, have reduced energy use per unit of economic output (Simmons, 2011). According to research by (B. Yang & Usman, 2021) that analyzed the economies from 1990 to 2016, the countries included in this analysis are Brazil, India, China, and South Africa. Technology has a minimal impact on ecological footprints in major emerging market countries, according to research by (Destek & Manga, 2021). According to (Sun et al., 2022) elaborate on this point by noting that countries with more developed economies, better technology, and more efficient energy use see a more considerable influence from innovation (Khattak et al., 2022; Kihombo et al., 2021; Liguo et al., 2022). All looked at the impact of innovations on reducing emissions in distinct locations. It has also been helpful in the United States (Liguo et al., 2022). Technology improvement mitigates environmental degradation by decreasing carbon emissions in key nuclear consumer countries, according to recent research by (Sadiq et al., 2023). However, more research is needed to understand how technological development affects the ecological footprint of economically sophisticated nations.
Fourthly, To combat the issue of financial exclusion (Andrianaivo & Kpodar, 2011), Policymakers in several nations continue to commit substantial resources to boost the amount of financial inclusion in their respective nations. Access to basic banking services in the formal economy is a key component of financial inclusion, especially for impoverished people (Allen, 2016). Policymakers and researchers have paid close attention to financial inclusion for four main reasons. To realize the United Nations' sustainable development objectives, financial inclusion is essential (Demirgüç-Kunt & Singer, 2017); There has been a plethora of research on several dimensions of financial inclusion, including its role in fostering development (Claessens et al., 2013); its impact on financial stability (Cull et al., 2012); its connection to economic expansion (D.-W. Kim et al., 2018); and the practices of individual nations in this area (Kabakova & Plaksenkov, 2018). Increasing the poor's access to financial services is widely recognized as a practical strategy for combating budgets for studies (Beck et al., 2007). (Demirgüç-Kunt & Singer, 2017) note, however, that most evidence on the connection between financial inclusion and growth resides at the individual and micro levels. The link underlying financial inclusion and broad economic growth remains poorly documented. At least in theory, it is possible to show a connection between financial inclusion, macroeconomic development, and inequality. However, the world bank points out that this correlation is not black and white. According to the literature, entrepreneurial endeavor is a function of capacity and not parental wealth (Beck et al., 2009).
Financial inclusion has garnered much focus in recent times. Policymakers and academics have emphasized financial inclusion for numerous reasons (Ozili, 2021). These are typical instances in which the availability of reasonably priced financial services and products fosters the use of renewable energies, and the implementation of environmental protection services, which decrease CO2 emissions by reducing fossil fuel consumption (Le et al., 2020) analyzed the effects of foreign direct investment, urban sprawl, energy consumption, and Industrialization in 31 different nations. The study found an upward trend in financial inclusion and carbon dioxide emissions. Financial inclusion's effect on greenhouse gas emissions was evaluated (Renzhi & Baek, 2020) for 103 countries. The research showed that financial inclusion lowers CO2 emissions using the GMM technique and data collected annually between 2004 and 2014. Financial inclusion could lessen the negative consequences of economic development by raising public awareness of environmental issues (Zafar et al., 2021).
Therefore, financial inclusion mitigates ecological degradation. Environmental quality can be improved by investing in renewable energy sources; lower finance costs, streamlined procurement procedures, and less oil pollution are all results of a well-developed financial sector (Kirikkaleli & Adebayo, 2021). However, to prevent rent-seeking and the accompanying environmental degradation, a coordinated development policy framework should be developed to increase local governments' accountability and openness, especially those highly reliant on natural resources. In order to improve environmental quality and support development that is both low-carbon and energy-efficient Sustainable Development Goals (SDGs), economic actors should be given access to green growth-oriented financial services (Ahmad & Satrovic, 2023).
With the advancement of science and technology, broadband infrastructure is recognized as a critical element for enhancing industrial competitiveness. Countries worldwide are proactively seizing the opportunity presented by implementing plans and policies to expand the availability of their lightning-fast broadband networks, which are the foundation of the "information superhighway" of the future. This development of the internet and information and communication technology (ICT) significantly impacts the scale and structure of energy consumption, posing challenges to energy sustainability (A. Lee et al., 2021; Wu et al., 2021).
Investigating the relationship between Broadband Internet access and energy conservation is essential. High-speed broadband plays a crucial role in the infrastructure of information and communication technology (ICT) and is considered a strategic asset for fostering the growth of the digital economy (DeStefano et al., 2018; Lee et al., 2022). Its significance extends to influencing social and economic activities and power infrastructures, which impact the sustainability of energy and the environment. The current energy structure, primarily reliant on fossil fuels, is associated with high pollutant emissions. While transitioning to cleaner energy sources can reduce emissions, it may also lead to increased energy consumption and a decline in TFEE. China has advanced coal energy technologies with high utilization efficiency, whereas renewable energy technologies are less mature and comparatively less efficient. This poses a challenge as reducing emissions and improving TFEE can conflict. Scholars have proposed total factor energy efficiency, a green notion (GTFEE), which incorporates pollutant emissions into evaluating energy efficiency. The development of information and communication technology (ICT), including broadband infrastructure, has implications for energy consumption, energy sector productivity, and the energy structure (Appiah-Otoo & Song, 2021; Wu et al., 2021).
It encourages the use of digital technologies, reduces the price of transactions, and speeds up data dissemination. Massive volumes of high-frequency data are transmitted to facilitate smart energy management, greatly facilitated by a robust broadband network. Broadband infrastructure and information and communication technology also aid in the conscious revamping of power infrastructure, reduce the risks associated with renewable energy, and speed up the shift to a more sustainable energy system. A great deal of risk and uncertainty is associated with the energy transition process, from price swings in energy to questions about how well it can improve efficiency (Zhang et al., 2022), which can have ripple effects on economic and monetary structures. Digital infrastructure, however, can lessen the blow of such unknowns (Lee et al., 2022a, 2022b).
Additionally, expanding the ICT sector, driven by broadband infrastructure, increases energy consumption by enabling economic activity. Consequently, there are advantages and disadvantages to implementing a broadband infrastructure to achieve energy sustainability. Adopting digital infrastructure, particularly broadband networks, can foster regional innovation in green technologies, improving energy conservation, reducing pollution emissions, and environmental sustainability (Ma et al., 2021). Integrating technology for sharing information and making connections, the shift to digital may help the environment and advance green, sustainable energy (Wu et al., 2021b). As the fourth wave of industrialization, digitalization is a game-changer with far-reaching economic and social consequences because of manufacturing innovation, distribution, circulation, and consumption. Research has found that the connection between digitization and energy sustainability is complex and ambiguous (C. Lee et al., 2022; Y. Sun et al., 2022; Q.,-J. Wang et al., 2022; Wu et al., 2021). Broadband infrastructure, as a component of the digital economic and social revolution, improves the speed and accuracy of information sharing while lowering transaction prices. Analyzing the role of broadband infrastructure can provide insights into how the mechanisms of digital transformation influence sustainable development, particularly in information transmission, leading to lower transaction and data expenses., By studying the impact of broadband infrastructure on financial stability, we can better understand the connection between digital transformation, environmental and financial sustainability, shedding light on the intricate dynamics at play in the digital era.