Smart strategies for a sustainable future: Bridging green finance, smart technologies, and sustainable energy efficiency to combat environmental degradation

Rising environmental degradation (ED) is a global phenomenon. While various environmental initiatives have been introduced across disciplines, mitigating environmental degradation remains a critical challenge. Recently, the world has emphasized the importance of smart technologies, green finance, and stringent government policies as additional tools for environmental sustainability; therefore, it is essential to clarify the empirical evidence on their effectiveness for environmental policymakers. This study evaluates income, population in large cities, smart technologies, green finance, sustainable energy efficiency, and government policy as environmental determinants for nine OECD (Organisation for Economic Co-operation and Development) nations from 2012 to 2023. Using panel quantile regression and fully modified ordinary least squares, the empirical findings reveal that the population of large cities and sustainable energy efficiency are positively associated with ED. Conversely, income shows an inverse connection and contributes to sustainability. In the context of smart technologies, this study focuses on digital transformation (DT) and artificial intelligence and finds a significant role for DT in environmental management. This study employs two proxies for green finance: green foreign direct investment and green bonds, both of which exhibit unusual behavior with respect to the intended theme. Finally, the moderating effect of green finance and smart technologies on sustainable energy efficiency doesn't support environmental management. This study also offers valuable suggestions for achieving long-term environmental sustainability.