Relating fiscal decentralization and financial inclusion to environmental sustainability: Criticality of natural resources

Navigating sustainable horizons: exploring the dynamics of financial stability, green growth, renewable energy, technological innovation, financial inclusion, and soft infrastructure in shaping sustainable development

This paper examines sustainable development, which employs an integrated approach to tackle environmental, social, and economic challenges. It provides a theoretical underpinning by examining sustainable development's inception, fundamental tenets, and conceptual structures. This study highlights the interdependence of social equity, economic prosperity, and environmental conservation, emphasizing the need for a comprehensive approach. Quantitative methodology is utilized in this study, and the dependent variable is sustainable development. Financial risk, green growth, technological innovation, renewable energy, financial inclusion, and soft infrastructure are all independent variables. The analysis is predicated on secondary data from the Organization for Economic Cooperation and Development and World Development Indicators databases spanning 2004 to 2019. An entropy-weighted method used for the green growth index is a metric that enhances the precision of variable indicators. Cointegration, correlation, VIF, cross-sectional dependency, and stationarity tests are among the diagnostic tests that inform the selection of methods for the panel data set. It is determined that fully modified ordinary least squares is the suitable technique. The findings suggest statistically significant positive correlations among greenhouse gases, financial inclusion, and soft infrastructure. Conversely, significant negative correlations exist between financial risk, green growth, renewable energy, and technological innovation. An estimated 55% long-run variance is present. The study's key finding is that financial risk has an adverse effect on sustainable development, while an impactful relationship where increased green growth is linked to decreased GHG emissions. This association is notably significant. Results show that renewable energy has a negative coefficient and significant negative impact on greenhouse gases, showing an active relation to enhancing sustainable development. In contrast, financial inclusion has a significant positive effect on sustainable development. The implications imply that providing incentives to institutions engaged in alternative energy, precisely renewable sources, could positively impact the environment. Government policies and funding regulations oriented toward sustainable development are indispensable for environmental sustainability. Government policies and incentives are pivotal in advancing an environmentally conscious and sustainable future. This study's contribution lies in elucidating the positive correlation between government interventions and promoting renewable energy adoption, thereby paving the way for a greener tomorrow.

Unlocking Urbanization: The symbiotic relationship between inclusive finance and urban development in China

The emergence and development of inclusive finance has made it possible for more economic entities to have easy access to a wider selection of financial services. This shift has significantly addressed the financial challenges inherent in the process of urbanization, making it a driver of the process of urban development. Therefore, this paper provides empirical evidence on the relationship between financial inclusion development and urbanization construction in China using provincial data and a panel-VAR model. The results show that: (1) There is a significant co-integration relationship among inclusive finance, urbanization, government support, and real estate development. (2) Inclusive finance has a long-term positive impact effect on urbanization. (3) Population urbanization has a positive impact on inclusive finance, but income urbanization has a negative impact on inclusive finance. To effectively promote the development of inclusive finance and urbanization, the following measures are of utmost importance: Firstly, while accelerating urbanization construction, it is necessary to expand and enhance the coverage of financial services. This will ensure that multiple regions can benefit from financial services. Secondly, to meet the diverse needs of different regions, more targeted financial products should be developed, making full use of the advantages of inclusive finance. Lastly, the government should strengthen its supervision of financial institutions and reduce the risks associated with inclusive finance, thereby ensuring a positive interaction between inclusive finance and urbanization development.

Exploring the nexus between fiscal decentralization and ecological sustainability: a fresh perspective from the moderating role of geopolitical risk and updated international evidence

Fiscal decentralization has been long employed to enhance the utilization of financial resources for sustainable development. Nevertheless, its effectiveness in limiting ecological degradation is ambiguous, especially when a country faces geopolitical risks. Different from previous works which separately examine the impacts of either fiscal decentralization or geopolitical risks on ecological sustainability, this research examines the moderating role of geopolitical risks on the non-linear relationship between fiscal decentralization and ecological footprints across different levels of environmental condition. An advanced panel quantile regression is applied to a sample of 23 advanced and emerging market economies from 1990 to 2018. The empirical results indicate that the nexus between revenue decentralization and ecological footprint follows an inverted U-shaped pattern at the 20th to 60th quantiles of ecological footprint. Meanwhile, the linkage between expenditure and ecological footprint reflects a U-shaped pattern across all quantiles. Notably, geopolitical risk strongly moderates the connection between fiscal decentralization and ecological footprint with the role being stronger in the case of revenue decentralization. This research provides valuable implementations to tailor policies for transferring revenue and expenditure responsibilities to sub-governmental bodies towards sustainability targets based on their current ecological conditions and contexts of geopolitical instability.

Financial inclusion, environmental degradation, and the moderating role of ICT: a global perspective

This study aims to investigate the global perspective on the relationship between financial inclusion and environmental degradation, taking into account the potential moderating role of information and communication technology (ICT). The research utilizes panel data from 131 countries, covering the period of 1995 to 2019. The findings show that financial inclusion has significant and positive impact on carbon emissions, implying that as financial inclusion increases, so do carbon emissions. Moreover, our findings reveal a significant negative moderating effect of the ICT on the relationship between financial inclusion and carbon emissions. This implies that the impact of financial inclusion on carbon emissions is contingent upon the level of ICT development. The robustness of these findings is confirmed through the use of alternative proxies for the explanatory and moderating variables, as well as alternative estimation methods. The outcomes of this study carry significant implications for both policy and practice.

The role of Chinese-style fiscal decentralization in promoting synergistic carbon and haze governance: insights from technological innovation

The reduction of haze and carbon emissions is extremely important for promoting sustainable development, improving air quality, enhancing health, and mitigating climate change. However, there is not enough research available on the impact of fiscal decentralization in China on the management of carbon and haze reduction. In order to thoroughly examine the effects of Chinese-style fiscal decentralization on the synergy between haze reduction and carbon reduction in different provinces, this study utilizes a dynamic spatial panel Durbin model using Han-Phillips Generalized Method of Moments (GMM) estimation and a multi-scale geographically and temporally weighted regression model. Our findings indicate that the eastern region consistently takes the lead in reducing haze and achieving carbon synergy. Fiscal technology decentralization has a direct positive impact and spatial spillover effect on carbon haze synergy with significant inverted U-shaped characteristics. These effects primarily arise from the promotion of technological innovation through fiscal technology decentralization. Furthermore, the influence of decentralizing fiscal technology expenditures on the degree of synergy between haze mitigation and carbon reduction varies significantly across China's provinces, both spatially and temporally. This entails promoting coordination between fiscal decentralization and policies related to haze and carbon emission reduction and encouraging information sharing, technology exchange, and collaborative projects between different regions to create a synergistic linkage effect. This will help achieve joint development and environmental protection goals in all regions. The discoveries carry significant consequences for directing the synchronized administration of haze and carbon and can serve as a solid basis for governmental decision-making aimed at enhancing air quality and attaining carbon neutrality through collaborative actions and policies.

Natural resources and financial development: Role of corporate social responsibility on green economic growth in China

While natural resource and financial growth have been researched extensively, the impact of corporate social responsibility on green economic growth through the incorporation of corporate regulations has received less attention. Empirical conclusions are supported by a balanced panel of data collected annually on resource-rich countries in China between 1992 and 2018. Multiple econometric issues, such as the existence of heterogeneity among the selected countries, can be tackled with the help of the PMG-ARDL method. There is evidence of cointegration between the variables according to the Johansen Fisher Panel Cointegration Test and the Kao Test. The findings of the PMG-ARDL suggest a favorable long-term relationship between resource income and public debt, but a negative short-term relationship. Public debt sustainability in the panel nations is threatened by their over-reliance on total natural resource rents if efficient fiscal and financial administration reforms are neglected. The Vector Error Correction Model (VECM) used in this panel establishes a causal relationship between available resources and the level of state debt. There is empirical data to back up the fiscal curse theory. If regulations are not in place to protect natural resources, they could impede economic development. The financial resource curse may be eased if China adopted more business-friendly regulations. Assuming this condition is met, policy recommendations for sustaining natural resource rent-related gains in economic development may be developed.

Do financial inclusion and environmental regulations affect the green economy? An empirical study with a generalized linear model

Reducing carbon emissions is an efficient strategy to cope with global warming, which continues to be a frightening element for environmental protection. However, the energy industry is responsible for a lot of pollution in the atmosphere. To promote a low-carbon growth model, it is essential to endorse financial inclusion and environmental regulations. This research uses panel data from 70 nations, covering 1995 to 2021, to examine the interplay between economic growth, human capital, urbanization, trade openness, and environmental regulation as the primary defining element of efficient energy. Several tests have been used to ensure that the data are typically distributed; these include the cross-sectional dependence test, the KMO test, and the Bartlett test. The generalized linear model and Driscoll-Kraay standard errors have also been implemented for interim and final analysis. Results show that low-carbon energy sources are guaranteed for certain economies when financial inclusion and environmental regulation are implemented. Economic development, urbanization, trade openness, and human capital significantly impact green economic recovery. In light of these findings, policymakers are working to increase energy efficiency and boost their citizens' living standards by promoting financial inclusion and environmental regulation like imposing environmental taxes and governmental laws for industries.

Do economic development and tourism heterogeneously influence ecological sustainability? Implications for sustainable development

While economic development-driven anthropogenic emissions pose challenges to ecological sustainability, the international travel and tourism sector has appeared as a hot contestant to bring sustainability to the ecological systems across varying development levels. This work investigates the diversified effects of the international travel and tourism sector and economic development on ecological deterioration, in the presence of urban agglomeration and energy use efficiency, across the development levels of China's 30 provincial units from 2002 to 2019. It contributes in two ways. (i) The stochastic estimation of environmental impacts by regression on population, affluence, and technology (STIRPAT) is modified to integrate the variables like international travel and tourism sector, urban agglomeration, and energy use efficiency. (ii) We measured an international travel and tourism sector index (ITTI) and made use of a continuously updated bias correction strategy (CUBCS) and a continuously updated fully modified strategy (CUFMS) for the long-term estimations. Besides, we used the bootstrapping-based causality technique for determining causality directions. The core results are as follows: Firstly, ITTI and economic development produced an inverse U-type association with ecological deterioration for the aggregate panels. Secondly, provinces exhibited a diverse range of links in that ITTI mitigated (boosted) the ecological deterioration in eleven (fourteen) provinces presenting diversified shapes of linkages. Economic development established the environmental Kuznets curve (EKC) theory with ecological deterioration in merely four provinces; however, the non-EKC theory is verified in twenty-four divisions. Thirdly, in China's east zone (high development scale), the ITTI revealed the ecological deterioration reduction (promotion) impact in eight (two) provinces. China's central zone (moderate development scale) exhibited ecological deterioration promotion in half of the provinces, and the other half showed a reduction impact. In China's west zone (low development scale), it promoted ecological deterioration in eight provinces. Economic development promoted (reduced) ecological deterioration in a single (nine) province(s). In China's central zone, it boosted (mitigated) the ecological deterioration in five (three) provinces. In China's west zone, it promoted (reduced) ecological deterioration in eight (two) provinces. Fourthly, urban agglomeration and energy use efficiency deteriorated and improved the environmental quality in aggregated panels, respectively; however, a diverse range of effects are observed for provinces. Finally, a unilateral bootstrap causality, from ITTI (economic development) to ecological deterioration, is revealed in twenty-four (fifteen) provinces. A bilateral causality is established in a single (thirteen) province(s). Based on empirical findings, policies are suggested.

Creating an indicator system for the United Nations Sustainable Development Goals in communities and municipalities: Application and analysis in an Austrian case study

Sustainability indicators should implement the United Nations Sustainable Development Goals (UN SDGs). Indicators in literature often consider large sets of actions and are thus complex in application. Therefore, this work derives energy- and resource-related SDG indicators for communities and municipalities with low complexity. Moreover, this work analyzes three different policy paths to promote SDG contribution. The policy paths consider SDG target settings and two different incentive schemes in the form of penalties and investment subsidies. The indicators and policy actions are applied in two case studies for communities and municipalities in Austria. Therefore, an optimization model that considers the case study setups, SDG targets and policy actions is developed. The modeling approach shows applicability and positive contribution to sustainable development by indicators. Moreover, the results show the applicability of the three policy paths. Implementing the target-setting path directly leads to the desired SDG targets and provides insights into the costs for target achievement. The incentive scheme paths also lead to selected targets, but they require a cost assessment of the provided incentive schemes. A combination of both incentive schemes leads to the lowest costs. However, policymakers should implement a workflow that considers all three policy paths for policy action settings.

Is environmental sustainability transmissible? Transportation-based environmental taxation spillovers for sustainable development

Environmental sustainability investigation has been a hotly debated topic of the modern literature; however, past studies have primarily overlooked its transmissibility or spillover outreach across economies. Herein, we investigate the novel aspect of whether transportation-based environmental taxation spatially induces spillover impacts across Italy, Germany, and France over the 1994-2020 period by employing a simultaneous spatial equation with multi-country dynamic stochastic general equilibrium modeling (DSGEM) framework. Transportation-based environmental taxation of the domestic economy negatively impacts its own investment and consumption, while it impacts the economy of neighboring economies positively. Change in output and investment in the domestic economy can be well explained by the environmental volatility of the domestic economy, whereas the environmental volatility of neighboring economies does not contribute much to explain the change in investment and output of the domestic economy. Volatility in pollution discharge occurs more by environmental volatility in the neighboring economy than in the domestic economy, and validating that environmental sustainability is transmissible across regions and economies. It urgently calls for environmental protection policies integrated and coordinated across the countries and regions to spread and capitalize on environmentally and economically favorable and sustainable effects globally. Achieving the spatially transmitted positive environmental and economic outcomes would help strengthen the Sustainable Development Goals (SDG), with a particular focus on Climate Action (SDG13), Sustainable Production and Consumption (SDG12), and Affordable and Sustainable Energy for All (SDG7).

Natural resources, fiscal decentralization, and environmental quality in China: an empirical analysis from QARDL approach

It is generally believed that fiscal decentralization is an essential way to increase the overall effectiveness and efficiency of the government through the transfer of financial autonomy to the local governments. On the same lines, this study attempts to confabulate the influence of two important economic indicators, (i) fiscal decentralization and (ii) natural resource rent in validation of the environmental Kuznets curve hypothesis. Our current analysis is grounded upon a developing economy - China - and will serve as a stepping stone for the similar economies. The time period for the empirical estimation is from 1990 to 2020. The study applied an advanced econometrics approach, called the quantile autoregressive distributed lag (QARDL), which has many advantages as compared to any conventional approach. The empirical outcomes, after estimations, illustrate that in the long run, FDE is having an unfavorable connotation with CO₂ emissions. NRR is another essential factor influencing the CO₂ emissions in the long run in the selected economy. The estimated outcomes are revealing the presence of the EKC. Furthermore, the present research elucidates the existence of the bi-directional causality between selected economic indicators, FDE and CO₂ emissions, and GDP square and CO₂ emissions. But there is a unidirectional causality between GDP and CO₂ emissions. Thus, policymakers should encourage the transfer of powers to the lower tiers of government to ameliorate environmental quality in the Chinese economy.

Empirics on linking industrial agglomeration, energy consumption, residential construction sector growth, and environmental sustainability

We looked at the long-term and short-term diversified relationships between industrial agglomeration, aggregate energy consumption, residential construction sector growth, and air pollution in China's 30 provincial units from 2004 through 2020. We contributed to the existing knowledge by calculating a holistic air pollution index (API) and applying advanced methods. We also augmented the Kaya identity by including industrial agglomeration and residential construction sector growth in the baseline framework. Based on empirical results: First, we revealed long-term stability among our covariates through panel cointegration analysis. Second, we uncovered a positive bilateral relationship between residential construction sector growth and industrial agglomeration in the long and short term. Third, we unfolded a unilateral positive correlation emerging from aggregate energy consumption to API, displaying the greatest influence in the east zone of China. Fourth, we observed a unilateral positive connection stemming from industrial agglomeration and residential construction sector growth to aggregate energy consumption and API in the long- and short-term dimensions. Finally, the linking nature was homogeneously prevailing across the long term and short term; however, the long-term impact size outweighed that of the short term. Given our empirical results, useful policy insights are discussed to provide the readers with a take-home message for substantiating sustainable development goals.

Role of financial decentralization on carbon taxation and carbon emission: Way forwards for economic recovery

The study intends to assess the role of financial decentralization on carbon taxation and carbon emission to recommend the way forwards for economic recovery. To estimate the nexus, study applied the cointegration analysis technique, CGE estimation model, long-run analysis using t-CGE model, and robustness analysis technique on Chinese data. Research findings declare that financial decentralization has significant role on extending the carbon taxation in China and financial decentralization supported 14.92% to expand carbon taxation throughout the Chinese industries. In such industries, pollution emission industries are the top of the list including transportation industry and other manufacturing companies. Overall, manufacturing industries size is about 78% and 11% size of transportation industry is included. Correspondingly, the findings also revealed that financial decentralization supports climate change mitigation with 29% and carbon taxation limits carbon emission with 44% in Chinese industries. Study directs to the stakeholders to enhance carbon taxation schemes in all sectors of the all the industries of China and come up with the viable policy action so that the desired sustainable development goals may achieve effectively. Hence, stakeholders need to consider recommendations of preceding research to enhance green economic recovery.

Does digital finance enhance industrial green total factor productivity? Theoretical mechanism and empirical test

The development and application of digital finance has brought profound changes to the real economy, and its impact on industrial green total factor productivity is worthy of attention and evaluation. The industrial green total factor productivity of each province in China is measured by using EBM-ML index with the provincial panel data collected from 2011 to 2020. The panel fixed effects model is used to estimate the impact of digital finance on industrial green total factor productivity. The intermediary effect model is constructed to analyze its conduction mechanisms. The heterogeneity of the impact of digital finance on industrial green total factor productivity is further explored. The results indicate that digital finance makes a significant contribution to the promotion of industrial green total factor productivity. Digital finance indirectly promotes the enhancement of industrial green total factor productivity by promoting technological innovation, driving industrial upgrading and stimulating entrepreneurial dynamism. The impact of digital finance on industrial green total factor productivity has obvious sub-dimension heterogeneity and regional heterogeneity. Based on the above conclusions, we also suggest policy recommendations such as unblocking the conduction channels of digital finance and implementing the differentiated digital finance development strategy. The highlight of this paper is that it takes digital finance as the entry point and shifts the research content to the real economy, broadening the research perspective of "digital finance".

A novel EKC perspective: do agricultural production, energy transition, and urban agglomeration achieve ecological sustainability?

We aim to analyze the existence of a novel agricultural production-augmented environmental Kuznets curve (EKC-AP) theory for energy transition, urban agglomeration, and financial depth. To conduct this research, we use a global panel of selected 54 countries belonging to low, medium, and high levels of economic development from 1971 to 2017. Since our data are distributed into three development levels, it is highly likely to face cross-sectional dependence across the countries within and between the development levels, which may provide biased empirical results. To outpace such possibility, we employ advanced econometric strategies, which are robust to cross-sectional dependence and slope heterogeneity issues. We found that agricultural production, energy transition, urban agglomeration, financial depth, and ecological degradation experience a long-term cointegrating equilibrium association. We also confirm that exists an EKC-AP linkage of agricultural production with ecological degradation in highly developed economies, while those at the low and medium levels of development reveal a positive exponential and monotonic impact, respectively, of agricultural production on ecological degradation. The energy transition is found to promote ecological sustainability in developed countries through technique impact, while it deteriorates the ecological quality in countries at the medium development level. Moreover, urban agglomeration adversely impacts the ecological quality in the economies at low and medium development levels, whereas it improves the ecological sustainability in developed economies. Besides, financial depth proves harmful to ecological sustainability, with less subtle effects in developed economies. Based on our findings, for countries at low and medium levels of development, we propose advancing farming techniques using ecologically friendly technologies, promoting green energy transition, expanding the share of the services sector, and providing green financial systems to support green investment projects to achieve the Sustainable Development agenda of the United Nations.