Testing Environmental Kuznets Curve in South Asian Countries with the role of Financial Development and Energy Consumption.

Abstract

The study concluded to examine the impact financial development is important factor on environmental degradation over the South Asian Countries. To address this problem, a comprehensive economic, financial, and energy policy is required. Measures aimed at promoting long-term development. The purpose of this research is to investigate the effects of Carbon dioxide emissions (CO2) are influenced by economic growth, financial development, and energy usage. The study applied Johansen and juselius Cointegration test and Pool Mean Group Panel ARDL model to investigate the long term relationship between these variables from the period 1990 – 2020 for South Asian Countries. In the long term, the results of financial development reveal a statistically significant and negative impact on environmental deterioration. The results of the study show that economic expansion has a beneficial impact on CO2 emissions, and the square of economic growth confirms the validity of the environmental Kuznets curve in South Asian countries. This research has substantial policy implications in terms of environmental development, clean energy conservation, and a well-functioning financial system for policy makers. On the basis of the findings, new directions are offered.