Financial Inclusion, Higher Education and CO2 Emissions in Asia‐Pacific Economies: Evidence From Development‐Stage Heterogeneity

Using an unbalanced panel of 198 country‐year observations for 12 Asia‐Pacific economies during 2004–2023, this article examines whether financial inclusion and higher education are linked to per capita CO2 emissions in the same way across development stages. The Financial Inclusion Index is built through principal component analysis from ATM density and commercial bank branch density. The empirical analysis reports pooled OLS, fixed‐effects, random‐effects, panel‐corrected standard errors and feasible generalised least squares estimates, with separate results for high‐income and developing economies. The evidence is not uniform across the region. In the developing‐economy subsample, financial inclusion is negatively associated with emissions, a pattern consistent with technique and composition channels. In the high‐income subsample, the coefficient is positive, suggesting that additional access to finance may accompany scale‐related consumption and energy use. Tertiary enrolment is positively associated with emissions in developing economies but not statistically significant in high‐income economies. GDP per capita remains a positive correlate across specifications, and trade openness is positive in the full and developing‐economy panels; urbanisation is not robustly significant. These results support a differentiated policy approach: financial deepening and higher education can contribute to lower‐carbon development only when they are steered towards cleaner investment, skills and production structures.