Investigating energy consumption, economic growth, environmental degradation and financial development in global warming process

Today, with the emergence of important environmental issues in the field of global warming due to greenhouse gas emissions, the issue of sustainable use of natural resources and reducing the negative effects of economic growth and development has become more important. In recent decades, the role of financial development in achieving higher economic development has been highlighted. Therefore, in the present study, while examining the effects of financial development, economic growth, energy consumption and carbon dioxide emissions on each other, it is tried to answer the question whether there is a relationship between economic growth and financial development index. Achieved financial development and environmental degradation? For this purpose, using the data of 1996 to 2017 selected countries of the Organization for Economic Cooperation and Development and using the method of estimating generalized moments and Kuznets environmental curve, the research question has been investigated. According to Kuznets's model, the results show that there is a correlation between economic growth index and environmental degradation. Therefore, the Kuznets curve theory is true in the studied countries, considering the role of financial development in achieving higher economic growth. Finally, the results show that in the studied countries, a one percent increase in the financial development index leads to a 0.82 percent increase in energy consumption and a decrease in carbon dioxide emissions. In addition, a one percent increase in carbon dioxide emissions led to a 0.70 percent increase in energy consumption and, conversely, a one percent increase in energy consumption in the study countries led to a 0.89 percent increase in carbon dioxide emissions. It is noteworthy that in addition to the two-way relationship between financial development index and economic growth, the U-shaped relationship between GDP per capita and financial development has also been confirmed in the study countries. The overall result of the present study also indicates the positive impact of financial development, economic growth, energy consumption and carbon emissions on each other except for financial development which reduces carbon dioxide emissions.