ICT, renewable energy, financial development, and CO2 emissions in developing countries of East and South Asia.

This study aims to analyze the impact of ICT, renewable energy consumption, and financial development on CO2 emissions in selected developing countries of East and South Asia. Using panel data spanning 1985-2020, Pooled Mean Group (PMG) estimator is used to analyze the short-run and long-run effects. Results suggest that ICT and financial development positively contribute to the degradation of the environment in the long run, while their impact on CO2 emissions is insignificant in the short run. On the other hand, renewable energy consumption affects environmental quality positively in both the long run and short run. It is also examined that economic growth affects CO2 emissions positively but the squared economic growth reduces CO2 emissions which validates inverted U-shaped EKC hypothesis. The empirical findings of the Granger Causality test suggest unidirectional causality from ICT and financial development to CO2 emissions, while a bi-directional relationship is found among renewable energy and CO2 emissions. Results imply that governments in these countries need to invest in renewable energy to control environmental degradation.