The impact of financial development on CO2 emissions in the framework of the environmental Kuznets curve

Purpose This study investigates the impact of financial development on CO 2 emissions in BRICS-T countries within the framework of the Environmental Kuznets Curve (EKC) hypothesis over the period 1990–2021. Methods The study employs panel quantile regression to examine heterogeneous effects across different emission levels. Robustness analyses were conducted using CUP-FM and CUP-BC estimators. In addition, second-generation panel data techniques were applied to account for cross-sectional dependence, heterogeneity, and structural breaks. Results The findings confirm the existence of an N-shaped EKC in BRICS-T countries. Financial development and energy consumption increase CO 2 emissions, while the magnitude of the effects differs across quantiles. The robustness results support the consistency of the main findings. Discussion and Conclusion The results indicate that financial development in BRICS-T countries still contributes to environmental degradation rather than environmental improvement. Therefore, policies promoting green finance, renewable energy investments, and sustainable financial systems are essential for reducing carbon emissions.