The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses
Abstract Climate change and environmental degradation threaten the world and global economic conditions. As one of countries’ most important economic components, the financial sector might be an effective tool for reducing and even reversing environmental degradation. The financial sector can affect...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2025-01-01
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| Series: | Financial Innovation |
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| Online Access: | https://doi.org/10.1186/s40854-024-00713-4 |
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| author | Faik Bilgili Erhan Muğaloğlu Sevda Kuşkaya Javier Cifuentes-Faura Kamran Khan Mohammed Alnour |
| author_facet | Faik Bilgili Erhan Muğaloğlu Sevda Kuşkaya Javier Cifuentes-Faura Kamran Khan Mohammed Alnour |
| author_sort | Faik Bilgili |
| collection | DOAJ |
| description | Abstract Climate change and environmental degradation threaten the world and global economic conditions. As one of countries’ most important economic components, the financial sector might be an effective tool for reducing and even reversing environmental degradation. The financial sector can affect sustainability through its lending and investment practices. The sector can play a role in financing sustainable projects and businesses, helping reduce CO2 emissions. By aligning its financial objectives with environmental protection, the financial sector can support the transition to a more sustainable future by helping reduce environmental degradation’s negative impacts. This paper examines the domestic financial sector’s impact on CO2 emissions in the United States over the 1990:Q1–2022:Q3 period. In this research, the nexus between the domestic financial sector (total debt securities, loans, liabilities, and total financial assets) and Carbon dioxide emissions in the U.S. is investigated by Morlet wavelet analysis. Rest of the world: sector discrepancy transactions, rest of the world: debt securities and loans, gross domestic product, and the square of the gross domestic product, are control variables in the estimated models. Partial wavelet coherency analyses prove that the financial sector reduces CO2 emissions at the 5–8-year frequency band during different subsample periods. The financial sector’s instruments can be effective in struggling with climate change. |
| format | Article |
| id | doaj-art-35de147b66cc47cba62ebed657131cac |
| institution | Kabale University |
| issn | 2199-4730 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj-art-35de147b66cc47cba62ebed657131cac2025-01-19T12:36:07ZengSpringerOpenFinancial Innovation2199-47302025-01-0111112210.1186/s40854-024-00713-4The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analysesFaik Bilgili0Erhan Muğaloğlu1Sevda Kuşkaya2Javier Cifuentes-Faura3Kamran Khan4Mohammed Alnour5Faculty of Economics and Administrative Sciences, Erciyes UniversityFaculty of Economics and Administrative Sciences, Erciyes UniversityDepartment of Law, Justice Vocational College, Erciyes UniversityDepartment of Financial Economics and Accounting, Faculty of Economics and Business, University of MurciaFaculty of Economics and Administrative Sciences, Erciyes UniversityDepartment of Economics, Institute of Social Sciences, Erciyes UniversityAbstract Climate change and environmental degradation threaten the world and global economic conditions. As one of countries’ most important economic components, the financial sector might be an effective tool for reducing and even reversing environmental degradation. The financial sector can affect sustainability through its lending and investment practices. The sector can play a role in financing sustainable projects and businesses, helping reduce CO2 emissions. By aligning its financial objectives with environmental protection, the financial sector can support the transition to a more sustainable future by helping reduce environmental degradation’s negative impacts. This paper examines the domestic financial sector’s impact on CO2 emissions in the United States over the 1990:Q1–2022:Q3 period. In this research, the nexus between the domestic financial sector (total debt securities, loans, liabilities, and total financial assets) and Carbon dioxide emissions in the U.S. is investigated by Morlet wavelet analysis. Rest of the world: sector discrepancy transactions, rest of the world: debt securities and loans, gross domestic product, and the square of the gross domestic product, are control variables in the estimated models. Partial wavelet coherency analyses prove that the financial sector reduces CO2 emissions at the 5–8-year frequency band during different subsample periods. The financial sector’s instruments can be effective in struggling with climate change.https://doi.org/10.1186/s40854-024-00713-4Financial sectorSustainable developmentTime–frequency analysisWavelet analysesThe U.S. |
| spellingShingle | Faik Bilgili Erhan Muğaloğlu Sevda Kuşkaya Javier Cifuentes-Faura Kamran Khan Mohammed Alnour The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses Financial Innovation Financial sector Sustainable development Time–frequency analysis Wavelet analyses The U.S. |
| title | The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses |
| title_full | The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses |
| title_fullStr | The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses |
| title_full_unstemmed | The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses |
| title_short | The nexus between the financial development and CO2 emissions: fresh evidence through time–frequency analyses |
| title_sort | nexus between the financial development and co2 emissions fresh evidence through time frequency analyses |
| topic | Financial sector Sustainable development Time–frequency analysis Wavelet analyses The U.S. |
| url | https://doi.org/10.1186/s40854-024-00713-4 |
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