“…A developed financial system gives the private sector greater access to credit, which stimulates economic activities and together generate higher demand for energy (Baloch & Meng, 2019; Danish, Saud, Baloch, & Lodhi, 2018; Sadorsky, 2010; Zaidi et al, 2019). Energy consumption, especially the use of fossil fuels (oil, coal and gas) release CO 2 into the atmosphere, weakening environmental quality (Hanif, Raza, Gago‐de‐Santos, & Abbas, 2019; Köne & Büke, 2019; Malhotra, 2020). The opposing explanation suggests that financial sector development can induce reductions in carbon emissions via economic and structural conditions that break barriers to the development, adoption and access to low‐carbon energy technologies (Campiglio, Godin, Kemp‐Benedict, & Matikainen, 2017; Tamazian, Chousa, & Vadlamannati, 2009; Zhou et al, 2019).…”