Time-varying impact of financial development on carbon emissions in G-7 countries: Evidence from the long history

Financial development has been widely proved to be a key driver of economic growth; however, its environmental impact is still inconclusive, especially for G-7 countries (i.e. Canada, France, Germany, Italy, Japan, the United Kingdom (UK), and State (US)). This paper, therefore, investigates time-varying financial on carbon dioxide (CO2) emissions over long historical period. The study analyzes data from 1870 2014 each country using bootstrap co-integration (TVC) rolling window estimation approaches. In addition, polynomial trends estimated parameters are obtained observe relationship between emissions. empirical findings reveal that CO2 history M-shaped in US; inverted N-shaped UK; (W-shaped) Germany. evidence opens new directions policy makers design comprehensive sector as an tool keep quality at sustainable levels.