Sustainable financial inclusion as a source of green environment? Evidence from selected regional comprehensive economic partnership countries

Abstract

The role of sustainable financial inclusion is considered crucial for attaining energy efficiency. It is vital for acquiring low carbon energy sources for an economy. This study attempt to integrate financial inclusions as a major defining factor of efficient energy combined with the role of economic growth, environment-related technologies, and the human capital index for RCEP countries from 2004 to 2019. The Westerlund error correction cointegration test is adopted for co-integration purposes, while the augmented mean group (AMG) method is carried for short-run and long-run analysis, and the dynamic ordinary least square (DOLS) test is used to ensure the robustness of the model. The outcomes indicate that financial inclusion induces a positive impact on renewable energy efficiency and ensures low energy sources for RCEP economies. Further, the role of economic growth, environment-related innovation, and human capital is also important for achieving energy efficiency. Furthermore, in the short-run, the Dumitrescu and Hurlin (Economic Modelling, 29(4), 1450–1460, 2012) panel heterogeneous non-causality test underscores causal bi-directional relationship among these variables. Based on these findings, the policymakers ensure improvement in the financial system and promote financial inclusion to increase energy efficiency and improve their citizen’s living standards.