Nexus of green energy, financial inclusion, militarization, and environmental sustainability: A global perspective

Abstract

This article investigates the dynamic impact of green energy consumption (GE), financial inclusion (FI), and military spending (MS) on environmental sustainability (ES) by utilizing a sample of 121 countries from 2003 to 2022. The dataset is divided into high-income, upper-middle income and low and lower-middle-income countries. We employed a two-step system GMM approach, which was further robust through panel Quantile and Driscoll-Kraay (D-K) regressions. The findings divulged that green energy resources benefit ES at global and all income levels because of having a significant negative impact of 5.9% on ecological footprints. At the same time, FI and MS significantly enhance ecological footprints by 7% and 6.9%, respectively, proving these factors detrimental to ES. Moreover, conflicts (CON), terrorism (TM), institutional quality (IQ), and socioeconomic conditions (SEC) also have a significantly positive association with global ecological footprints and most of the income level groups. Dissimilarly, financial inclusion and armed conflicts have a non-significant influence on ecological footprints in low-income and high-income countries, respectively. Furthermore, institutional quality enhances ES in upper-middle and low and lower-middle-income countries by negatively affecting ecological footprints. At the same time, terrorism significantly reduces ecological footprints in high-income countries. This research also provides the imperative policy inferences to accomplish various SDGs.