Driving the green transition: the impact of Fintech, green energy and natural resources on lowering CO2 emissions in the BRICS-11 countries

Environmental challenges like sea level increases, droughts, and floods are escalating globally due to rising temperatures. To achieve carbon neutrality and mitigate human-induced climate change and environmental degradation, the BRICS-11 countries, as major contributors to global CO2 emissions, must implement substantial climate action measures. This study examines the impact of financial technology (FIN), natural resource rents (NRR), green energy (GEN), and economic growth (GDP) on CO₂ emissions from 1990 to 2023, employing advanced panel econometric techniques, namely CS-ARDL and the AMG test. The westerlund cointegration test confirms a stable long-run relationship among the variables, while the cross-sectional dependence test highlights significant interdependencies across countries. The CS-ARDL model reveals that, in the long run, 1% rise in FIN reduces CO₂ emissions by 0.116%, while GEN lowers emissions by 0.151% respectively, underscoring the crucial role of digital finance and green energy in enhancing environmental quality. Conversely, NRR and GDP increase emissions by 0.196% and 0.312%, respectively, emphasizing the environmental consequences of resource dependency and economic expansion. The Augmented Mean Group (AMG) robustness check further supports these results, showing that FIN and GEN reduce CO₂ emissions by 0.162% and 0.122%, respectively, while NRR and GDP increase emissions by 0.151% and 0.188%, respectively. These findings highlight the urgent need for policy interventions that promote financial digitalization and green energy investments to curb CO₂ emissions in BRICS-11 countries. Governments should adopt sustainable resource management practices and ensure that economic growth is decoupled from environmental degradation through technological advancements and regulatory frameworks. Expanding power generation from renewable sources such as wind and solar can meet a significant share of energy demands while substantially reducing CO₂ emissions.