Fintech Growth in Asia: A Shift Towards a Net-Zero Carbon Economy

Abstract

Environmentalists' attention has shifted in the modern era from climate quality to fintech advancements and cryptocurrency mining, which have both increased electricity consumption. Further exploration of fintech advancements is necessary to assess their cost and benefits in order to enhance policy-making and regulatory reform efforts aimed at mitigating climate change. The current literature presents conflicting findings regarding the impact of fintech on environmental quality. Therefore, it is necessary to examine the actual role of fintech innovations in relation to climate quality. This study aims to examine the impact of fintech development on reducing greenhouse gas emissions in selected Asian economies, with the goal of achieving net zero carbon economies. The selection of Asian countries was based on their respective income levels. Our analysis, utilising OLS, 2SLS, and GMM econometric models, reveals a negative relationship between fintech developments and innovations and greenhouse gas emissions. Our findings demonstrate robustness, as we observe consistent outcomes even after controlling for relevant variables and addressing endogeneity concerns. The findings provide valuable insights for governments and policymakers in formulating effective policies to improve environmental quality through the use of fintech advancements.