This study examines the impact of inclusive finance and control of corruption on environmental pollution in Ghana from 2000 to 2020, considering the effects of remittances and renewable energy consumption. The results indicate that both inclusive finance and control of corruption have a significant negative influence on CO2 emissions, emphasizing the importance of promoting financial inclusion and combating corruption to reduce environmental pollution. However, the study finds that remittances have a positive but insignificant impact on pollution. Additionally, there is a negative relationship between renewable energy consumption and pollution, highlighting the role of renewable energy in mitigating environmental harm. Policy recommendations include enhancing financial inclusion, intensifying anti-corruption efforts, and promoting renewable energy sources.
TopIntroduction
The pursuit of industrial growth and modern lifestyles has had ramifications on the ecosystem. For instance, excessive combustion of fossil fuels like coal, oil, and gas emits massive volumes of carbon dioxide (CO2) and other greenhouse gases (GHG) into the atmosphere (Yakubu et al., 2021). Similarly, agricultural activities such as the uncontrolled use of chemical fertilizers lead to the release of GHGs such as methane (CH4) and nitrous oxide (N2O). In recent years, the international community has come to the realization that addressing concerns relating to environmental sustainability and biodiversity conservation is critical in enhancing progress and well-being. The demand for energy in emerging and developed countries has grown due to industrial growth and the surge in technical innovation. Although energy consumption contributes to economic advancement, it is also a major source of environmental degradation (Saidi & Mbarek, 2016). To achieve carbon neutrality and improve environmental sustainability, it is necessary to understand the factors that drive CO2 emissions.
Despite the extensive body of literature exploring the influence of various factors, such as macroeconomic variables, on environmental pollution, the role of finance has been relatively understudied. While a few studies have shed light on the impact of financial development on environmental pollution (Le & Ozturk, 2020, Pata & Yilanci, 2020; Amjad et al., 2021; Deng et al., 2022; Ahmad et al., 2022; Das & Sethi, 2023; Shahzadi et al., 2023), it remains an area that warrants further investigation and analysis given its multidimensionality. In recent years, inclusive finance, a critical component of the finance ecosystem, has emerged as a significant driver of environmental sustainability. Inclusive finance has the potential to play a crucial role in achieving environmental sustainability by providing financial services to underrepresented and underprivileged communities. It accomplishes this by facilitating access to necessary resources, fostering the establishment of environmentally responsible enterprises, and promoting community resilience.
Despite its promise to improve environmental sustainability, inclusive finance encounters significant hurdles, particularly in nations plagued by corruption. Corruption weakens the efficacy and confidence of financial institutions by diverting money away from intended recipients and prolonging inequity (Yakubu, 2019). In Ghana, corruption comes in many forms and shapes, including bribery, embezzlement, and misappropriation of money, erecting a substantial barrier in the process of initiating and sustaining inclusive finance programs. The resultant effect has been a weak inclusive finance architecture, limiting its ability and potential to tackle environmental concerns.
The main objective of this research is to investigate the effects of inclusive financing and corruption control on environmental pollution in Ghana. Studies on inclusive finance have been primarily focused on its impact on economic growth (Singh & Stakic, 2021; Van et al., 2021; Yakubu & Bunyaminu, 2021; Pal & Bandyopadhyay, 2022; Chinoda & Kapingura, 2023; Ndombi Avouba et al., 2023). Therefore, this research offers a unique perspective by emphasizing the impact of inclusive finance in fostering environmental sustainability in Ghana, a topic that has not previously been fully researched. The study's findings and insights will be of great interest to policymakers and stakeholders in Ghana and other developing nations interested in fostering sustainable energy development. Additionally, by shedding light on the link between inclusive finance, corruption control, and environmental pollution, this study intends to contribute significantly to the achievement of the United Nations Sustainable Development Goals, notably Goal 13: Climate Action.
In the next section, the researchers review related literature. Section three explains the methodology of the study and Section 4 discusses the main findings. The final section presents the conclusion and recommendations.