Financial development has been found to have mixed effects on CO2 emissions. One reason appears to be the relationship is not linear, as is assumed in most earlier studies. This paper re-examines the relationship between financial development and CO2 emissions based on a panel data of 61 countries categorised as high- and middle-income economies, from 1990 to 2018. This study uses the linear ARDL and nonlinear ARDL (NARDL) methods to analyse the impact of positive and negative shocks in financial development on CO2 emissions. Additionally, the panel causality between the variables is also investigated. The analyses from ARDL and NARDL reveal that in the long run, financial development helps to minimise CO2 emissions for high income economies, but it raises CO2 emissions and thereby decreases environmental quality for middle-income economies. Supporting our nonlinear hypothesis, we find that both negative and positive shocks of financial development have significant impacts on CO2 emissions, while the latter have a more profound effect. In particular, the findings suggest that the impacts of financial development on CO2 emissions are distinctive in high- and middle-income economies, leading to useful policy implications, including the suggestion that international development bodies help middle-income countries to incorporate consideration of environmental effects into the operation of their financial institutions and systems at an earlier stage of development than would generally be the case.

已经发现金融发展对二氧化碳排放有不同的影响。一个原因似乎是这种关系不是线性的，正如大多数早期研究所假设的那样。本文基于 1990 年至 2018 年 61 个高收入和中等收入经济体国家的面板数据，重新审视金融发展与 CO2 排放之间的关系。分析金融发展的正负冲击对二氧化碳排放的影响。此外，还研究了变量之间的面板因果关系。ARDL 和 NARDL 的分析表明，从长远来看，金融发展有助于将高收入经济体的二氧化碳排放量降至最低，但它会增加二氧化碳排放量，从而降低中等收入经济体的环境质量。支持我们的非线性假设，我们发现金融发展的负面和正面冲击对 CO2 排放都有显着影响，而后者的影响更为深远。特别是，研究结果表明，金融发展对二氧化碳排放量的影响在高收入和中等收入经济体中是独特的，从而产生有用的政策影响，包括国际发展机构帮助中等收入国家考虑环境影响的建议在比一般情况下更早的发展阶段进入其金融机构和系统的运作。