FinTech and sustainable financing for low carbon energy transitions: A biodiversity and natural resource perspective in BRICS economies

BRICS countries grapple with formidable challenges, declining biodiversity, and energy crises. This study examines the transformative potential of financial technology and sustainable financing in driving low-carbon energy transitions. It aims to achieve two objectives: first, to investigate the effectiveness of FinTech and sustainable financing in driving low-carbon energy transitions; and second, to probe the relationship between these mechanisms and the imperatives of biodiversity and sustainable natural resource utilization in the context of BRICS economies. Through the application of advanced econometric techniques such as fully modified OLS (FMOLS), dynamic OLS (DOLS), fixed effect-OLS (FE-OLS), and Method of Moments Quantile Regression (MMQR), this study investigates the impact of FinTech, sustainable financing, and biodiversity and natural resource utilization on low-carbon energy transitions. Our empirical findings underscore a robust, long-term co-integrating relationship among low-carbon energy advancement, financial technology, financial development, biodiversity preservation, and natural resource utilization. Notably, both FinTech innovations and accessible sustainable financing mechanisms positively influence the adoption of low-carbon energy practices. Moreover, economies rich in biodiversity and with higher income levels exhibit a strong inclination toward low-carbon energy sources. However, overreliance on natural resource extraction hampers the sustained adoption of low-carbon energy practices. This study recommends strategies that leverage FinTech and sustainable financing, while emphasizing the importance of safeguarding natural resources and promoting environmental management. These measures effectively address the energy crisis and foster policies and practices for low-carbon energy transitions.