The Relationship Between Banking Sector Development, Financial Development, Economic Growth, Renewable Energy and Co₂ Emissions: Evidence from Brazil and Türkiye

Öz

In this research article, the impact of CO2 emissions on the environmental improvement of the financial structure in Brazil and Türkiye, two emerging economy countries, is observed using comprehensive econometric methods in terms of banking sector development, financial development, economic growth and renewable energy variables. In particular, the research on financial and environmental transmission channels with the Environmental Kuznets Curve (EKC) hypothesis, which is widely mentioned in the literature, was examined with powerful econometric methods such as FMOLS, DOLS, CCR, ARDL, ECM, F-Bounds and CUSUM using annual data in the period 1990-2021. The findings indicate notable differences between these two countries. While the banking sector development variable was found to increase CO₂ emissions in Türkiye, it had no significant effect in Brazil. Furthermore, the renewable energy variable was clearly found to reduce emissions in both countries. In terms of the EKC hypothesis, Brazil is still in the rising phase, while Türkiye has entered a declining phase. The lack of such a comprehensive analysis and research examining these two countries at similar development stages makes this article unique and offers the opportunity for a detailed methodological comparison. The findings emphasise that green finance policies should be designed differently, considering the dynamics of each country, and that uniform policies will not be sufficient.

Anahtar Kelimeler

• Green Finance
• Environmental Kuznets Curve
• Financial Development

Kaynakça

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