Climate action under the paris agreement: How do economic globalization and financial development make asia environmental quality better?

Abstract

Environmental pollution and climate change are urgent issues threatening the survival of humanity. Therefore, researching factors that promote sustainable environments is crucial for both individual nations and the global community. Accordingly, this study was conducted in 43 Asian countries between 2009 and 2022 to examine the impact of economic growth, financial development, and economic globalization and the moderating role of the Paris Agreement on environmental issues. Using S-GMM estimation, the authors discover an inverted U-shaped impact of economic growth on environmental degradation, which is consistent with the EKC hypothesis. Besides, both economic globalization, financial development and the Paris Climate Agreement have negative impacts on environmental degradation. The findings also show that the Paris Climate Agreement negatively moderates the Financial Development - Environment Degradation nexus and has a positive moderating effect on Economic Globalization - Environment Degradation nexus. Based on the research results, the study has provided policy implications and recommendations to improve environmental quality in Asia.