Interplay of Digital Financial Inclusion, Technological Innovation, Good Governance, and Carbon Neutrality in the Top 30 Remittance-Receiving Countries: The Significance of Renewable Energy Integration

Abstract

Our research examines the interconnections between digital finance inclusion, technological innovation, good governance, renewable energy, and carbon neutrality in the top 30 remittance-receiving countries from 2001 to 2020. Utilizing comprehensive panel data analysis with SH tests, CSD tests, CADF tests, D-H causality tests, and robustness checks, we analyze the effects of these factors on carbon emissions. The study reveals that digital financial inclusion is positively associated with reduced carbon emissions, indicating that access to digital finance can significantly lower carbon footprints. This supports previous findings that digital finance reduces reliance on traditional banking and paper transactions, aiding environmental sustainability. Additionally, remittances positively impact carbon neutrality by funding clean energy technologies and sustainable development projects. However, the expansion of digital financial services is linked to increased energy consumption and electronic waste, highlighting its complex environmental impact. Effective governance plays a crucial role in achieving carbon reduction goals, with transparent and accountable governance systems implementing successful climate policies. Technological innovation, particularly in clean energy, is essential for transitioning to a low-carbon economy. Our study shows strong positive correlations among digital finance, remittances, innovation, good governance, renewable energy, and carbon neutrality. We recommend policies that invest in renewable energy, enhance governance practices, leverage digital finance and remittances for sustainable development, and foster global collaboration. This integrated approach can significantly advance environmental sustainability and carbon neutrality, offering valuable insights for policymakers and stakeholders on sustainable economic development and environmental protection.