Carbon neutrality targets, optimal environmental management strategies & the role of financial development: New evidence incorporating non-linear effects and different income levels

Financial development has been found to have mixed effects on CO2 emissions. One reason appears be the relationship is not linear, as assumed in most earlier studies. This paper re-examines between financial and emissions based a panel data of 61 countries categorised high- middle-income economies, from 1990 2018. study uses linear ARDL nonlinear (NARDL) methods analyse impact positive negative shocks Additionally, causality variables also investigated. The analyses NARDL reveal that long run, helps minimise for high income but it raises thereby decreases environmental quality economies. Supporting our hypothesis, we find both significant impacts emissions, while latter more profound effect. In particular, findings suggest are distinctive leading useful policy implications, including suggestion international bodies help incorporate consideration into operation their institutions systems at an stage than would generally case.