Modelling the Nexus between Financial Development, FDI, and CO2 Emission: Does Institutional Quality Matter?

The present study draws motivation from the United Nations Sustainable Development Goals, with a special focus on SDGs 7 and 13, which highlight need for access to clean affordable energy in an environment devoid of emissions; it addresses climate change mitigation context Sub-Saharan Africa. To this end, carbon-income function setting Africa (SSA) is constructed. dynamic relationship between financial development evaluated using three indicators foreign direct investment carbon dioxide emissions (CO2), while accounting regulatory institutional quality “generalized method moment” estimation technique that both heterogeneous cross-sectional issues. Empirical results obtained showed positive statistical economic growth CO2 SSA at <0.01 significance level. This suggests that, SSA, path pollutant driven. indicates still scale phase her trajectory. However, important finding indicators, such as political stability, government effectiveness, control corruption, voice accountability, all exert negative effect emissions. implies measures militate against SSA. Based empirical findings study, can be concluded FDI inflows assist ameliorating Thus, paradigm shift cleaner technologies, renewables, are more eco-friendly, encouraged Africa, current demonstrates mitigating role renewable consumption Further policy prescriptions presented concluding section.