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Does financial inclusion and information communication technology affect environmental degradation in oil-producing countries?

Author

Listed:
  • Isbat Alam
  • Lu Shichang
  • Saqib Muneer
  • Khalid Mahsan Alshammary
  • Muhammad Zia ur Rehman

Abstract

Advances in financial inclusions have contributed to economic growth and poverty alleviation, addressing environmental implications and implementing measures to mitigate climate change. Financial inclusions force advanced countries to progress their policies in a manner that does not hinder developing countries’ current and future development. Consequently, this research examined the asymmetric effects of information and communication technology (ICT), financial inclusion, consumption of primary energy, employment to population ratio, and human development index on CO2 emissions in oil-producing countries (UAE, Nigeria, Russia, Saudi Arabia, Norway, Kazakhstan, Kuwait, Iraq, USA, and Canada). The study utilizes annual panel data spanning from 1990 to 2021. In addition, this study investigates the validity of the Environmental Kuznets Curve (EKC) trend on the entire sample, taking into account the effects of energy consumption and population to investigate the impact of financial inclusion on environmental degradation. The study used quantile regression, FMOLS, and FE-OLS techniques. Preliminary outcomes revealed that the data did not follow a normal distribution, emphasizing the need to use quantile regression (QR). This technique can effectively detect outliers, data non-normality, and structural changes. The outcomes from the quantile regression analysis indicate that ICT consistently reduces CO2 emissions in all quantiles (ranging from the 1st to the 9th quantile). In the same way, financial inclusion, and employment to population ratio constrains CO2 emissions across each quantile. On the other side, primary energy consumption and Human development index were found to increase CO2 emissions in each quantile (1st to 9th). The findings of this research have implications for both the academic and policy domains. By unraveling the intricate interplay between financial inclusion, ICT, and environmental degradation in oil-producing nations, the study contributes to a nuanced understanding of sustainable development challenges. Ultimately, the research aims to guide the formulation of targeted policies that leverage financial inclusion and technology to foster environmentally responsible economic growth in oil-dependent economies.

Suggested Citation

  • Isbat Alam & Lu Shichang & Saqib Muneer & Khalid Mahsan Alshammary & Muhammad Zia ur Rehman, 2024. "Does financial inclusion and information communication technology affect environmental degradation in oil-producing countries?," PLOS ONE, Public Library of Science, vol. 19(3), pages 1-23, March.
    • Handle: RePEc:plo:pone00:0298545
    DOI: 10.1371/journal.pone.0298545
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    References listed on IDEAS

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