Economic globalization, financial development, renewable energy, and the Environmental Kuznets Curve: Evidence from 26 major global economies

This study evaluates the Environmental Kuznets Curve (EKC) hypothesis for a panel of 26 major developed and emerging economies (extended G20 Economies) from 1990 to 2022. It also analyzes how renewable economic globalization, financial development, and green energy consumption affect carbon dioxide (CO 2 ) emissions. The primary analytical methods were the Driscoll–Kraay Standard Errors and the Method of Moments Quantile Regression (MM-QR). Robustness checks used the Dynamic Common Correlated Effects Mean Group (DCCE-MG) estimator. The results support the EKC hypothesis confirming the existence of a non-linear nexus between economic growth and environmental degradation across 26 major economies. Economic growth, as measured by GDP, correlate with higher CO 2 emissions, while renewable energy use and GDP 2 contribute to environmental improvement. The MM-QR results indicate that financial development tends to worsens environmental conditions, while the mitigating effects of renewable energy weaken at higher quantiles. To account for cross-sectional dependence, slope of heterogeneity, and unobserved common factors, the DCCE-MG estimator is applied. The DCCE-MG results validates the EKC and the environmental benefits of renewable energy consumption, while revealing significant long-run reductions in CO 2 emissions associated with financial development and economic globalization. These findings suggest that governments should pursue integrated strategies that promote access to financing, increasing the adoption of clean energy, and foster economic integration as complementary pathways toward sustainable development.