Concerns regarding environmental sustainability have generally been an important element in achieving long-term development objectives. However, developing countries struggle to deal with these concerns, which all require specific treatment. As a result, this study explores the interaction between financial development, renewable energy consumption, technological innovations, and CO2 emissions in India from 1980 to 2019, taking into account the critical role of economic progress and urbanization. The Autoregressive Distributed Lag (ARDL) model is used to quantify long-run dynamics, while the Vector Error Correction Model is used to identify causal direction (VECM). According to the study’s conclusions, financial development has a considerable positive impact on CO2 emissions. The coefficient of renewable energy consumption and technical innovations, on the other hand, is strongly negative in both the short and long run, indicating that increasing these measures will reduce CO2 emissions. Furthermore, economic expansion and urbanization have a negative impact on environmental quality since they emit a significant amount of CO2 into the atmosphere. The results of the robustness checks were obtained using the Fully Modified Ordinary Least Squares (FMOLS), the Dynamic Ordinary Least Squares (DOLS), and the Canonical Cointegration Regression (CCR) approaches to verify the findings. The VECM results reveal that there is long-run causality in CO2 emissions, financial development, renewable energy utilization, and urbanization. A range of diagnostic tests were also used to confirm the validity and reliability. This study delivers new findings that contribute to the existing literature and may be of particular interest to the country’s policymakers in light of the financial system and its role in environmental issues.

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Few studies are found to examine the relationship between financial openness and economic complexity. Using a panel data of 120 economies during 1996–2016, this paper aims to examine the impact of financial openness, human capital, institutional quality, banking industry concentration, and other factors on economic complexity. We establish dynamic panel models that incorporate lagged‐dependent variables and employ the Generalized Method of Moments (GMM) for estimation. Our pooled‐sample regression results show that the enhancement of overall financial openness could increase the economic complexity significantly, as well as de‐facto and de‐jure openness. The subsample regressions indicate heterogeneous impacts of financial openness depending on country groups and industry. Besides, there exists significant path dependence for ECI improvement, which is more prominent in high‐income countries. For low‐ and middle‐income countries, greater GVC participation and lower banking concentration can promote ECI improvement significantly.

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Establishing a fair platform for allocating carbon emission responsibility worldwide determines the sustainability and efficiency of the world’s climate policy and framework. In the context of global environmental load displacement and CO2 transfer, this paper endeavors to examine the relationship between economic complexity and embodied carbon emissions based on cross-country panel data. Our study utilizes the generalized method of moments (GMM) approach to estimate our dynamic models covering 34 OECD countries and 24 non-OECD countries from 1995 to 2015. The empirical results show a heterogeneous impact of economic complexity on embodied carbon emissions in exports (EEE) and imports (EEI). Besides, the scale effect, composition effect, and technology effect are also significant drivers of embodied carbon emissions. The improvement of economic complexity can decrease the marginal effects of export scale and export structure on foreign EEE (but not domestic EEE) significantly, while the marginal positive impacts of technology on EEE can be further enhanced by economic complexity growth. Moreover, there is no strong evidence to prove the significant indirect impacts of economic complexity on foreign carbon emission embodied in imports, while economic complexity has significantly positive indirect impacts on domestic carbon emission embodied in imports only through import scale. In the subsample regressions, we found asymmetric impacts of economic complexity between high-income countries and low- and middle-income countries.