Purpose: Studies on the relationship between green finance (GFS), government effectiveness (GOVI), technology (TECH), and environmental quality (EVQ) focus on developed regions due to their high carbon dioxide emissions, robust institutional frameworks, and well-integrated green finance mechanisms. However, despite sub-Saharan Africa’s (SSA) low emissions, the region faces severe climate vulnerability due to lax governance and limited access to green finance. This study examines the impact of GFS, TECH, and GOVI on EVQ in SSA from 1999 to 2023, addressing a key literature gap. Green finance is measured through financial development indicators, while environmental quality is assessed using sustainability metrics, reflecting the multidimensional impacts of economic activities on EVQ. Methodology: Using the pooled mean group autoregressive distributed lag (PMG-ARDL) model, the study addresses key methodological issues in previous studies, such as endogeneity and serial autocorrelation. This approach enables a comprehensive analysis of both long- and short-run relationships between GFS and EVQ. Findings: Results reveal that GFS promotes sustainable development through investment in technology and education, which enhances environmental conservation and biodiversity. However, foreign direct investment negatively impacts EVQ due to lax regulatory framework allowing detrimental environmental practices by multinational corporations. The results emphasise the need for institutional reforms to align investments with stringent environmental frameworks and sustainable economic growth objectives. Contribution: By focusing on SSA, a region facing severe climate vulnerability and ecological challenges, the study provides practical policy recommendations for achieving zero-emission targets by 2060 by enhancing green finance integration, strengthening institutional frameworks, and fostering technological innovation. Additionally, the results emphasise the importance of public awareness, policy enforcement, and green energy adoption to mitigate environmental degradation.
Samuel et al. (Tue,) studied this question.