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<p>In the wake of intensifying calls to minimise global carbon emissions, academic and policy discourses have shifted their focus to financial development. While various empirical studies contend that inclusive financial development can foster economic development while significantly reducing carbon emissions, the direction of influence remains masked. Accordingly, the main aim of this study is to determine the synergistic impact of financial inclusion and renewable energy consumption on CO<sub>2</sub> emissions (CO2E) in Africa using balanced panel data from 2004 to 2020. The evidence from different robust estimation techniques—Discroll-Kraay’s Fixed Effects, Two-Step Instrumental Variable Generalised Method of Moments (2SIV-GMM), panel-corrected standard error (PCSE) and Dynamic Panel Threshold (DPT)—that account for endogeneity and cross-sectional dependence unravels financial inclusion’s significant heterogeneous reduction impact on CO2E in Africa, significantly impacting low-income countries. Also, the moderating results indicate that renewable energy consumption amplifies the reduction impact of financial inclusion on CO2E, implying that improved renewable energy consumption conditions financial inclusion’s abatement of CO2E in Africa. Furthermore, the results indicate a threshold effect of financial inclusion on CO2E in Africa, suggesting that greater financial inclusion reduces CO2E. The findings suggest that prioritising energy transition policies could benefit climate-related financial resource allocation in Africa.</p>

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The road towards the net-zero emissions agenda through synergistic roles of financial inclusion and renewable energy consumption in Africa

  • 期刊论文

  • 发表日期：

    2026年3月20日

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  • Isaiah Maket

摘要

In the wake of intensifying calls to minimise global carbon emissions, academic and policy discourses have shifted their focus to financial development. While various empirical studies contend that inclusive financial development can foster economic development while significantly reducing carbon emissions, the direction of influence remains masked. Accordingly, the main aim of this study is to determine the synergistic impact of financial inclusion and renewable energy consumption on CO2 emissions (CO2E) in Africa using balanced panel data from 2004 to 2020. The evidence from different robust estimation techniques—Discroll-Kraay’s Fixed Effects, Two-Step Instrumental Variable Generalised Method of Moments (2SIV-GMM), panel-corrected standard error (PCSE) and Dynamic Panel Threshold (DPT)—that account for endogeneity and cross-sectional dependence unravels financial inclusion’s significant heterogeneous reduction impact on CO2E in Africa, significantly impacting low-income countries. Also, the moderating results indicate that renewable energy consumption amplifies the reduction impact of financial inclusion on CO2E, implying that improved renewable energy consumption conditions financial inclusion’s abatement of CO2E in Africa. Furthermore, the results indicate a threshold effect of financial inclusion on CO2E in Africa, suggesting that greater financial inclusion reduces CO2E. The findings suggest that prioritising energy transition policies could benefit climate-related financial resource allocation in Africa.