Remittance outflows and environmental sustainability: The roles of financial development, energy transition, openness to trade, and natural resource rents in the world's largest remittance-providing economies

This study examines the environmental implications of remittance outflows, an area that has received far less attention than remittance inflows despite the growing importance of major migrant-providing economies in global sustainability efforts. It develops an integrated analytical framework incorporating remittance outflows, financial development, energy transition, openness to trade, natural resource rents (NRRs), and economic development to explain carbon emissions in the ten largest remittance-providing countries worldwide. Using annual panel data from 1990 to 2023, the study employs the second-generation cross-sectionally augmented autoregressive distributed lag estimator to estimate long-run and short-run relationships, with augmented mean group and common correlated effects mean group estimators used for robustness and a supplementary instrumental-variable 2SLS analysis used as a diagnostic exercise. The results indicate a stable long-run equilibrium relationship among the variables. Remittance outflows have no statistically significant long-run association with carbon emissions, indicating no robust evidence of a direct conditional effect after controlling for the structural determinants included in the model. In contrast, the renewable energy consumption share significantly reduces carbon emissions, whereas financial development, trade openness, and NRRs increase emissions. Economic growth has no significant long-run effect after controlling for these structural factors. The findings are consistent with the Pollution Haven Hypothesis and Resource Curse Theory, while indicating that financial deepening alone does not guarantee environmental improvement. These results underscore the importance of accelerating renewable-energy deployment, strengthening green financial systems, integrating environmental safeguards into trade policies, and promoting sustainable natural-resource governance to advance Sustainable Development Goals 7, 13, and 17.