Impact of foreign remittances, disaggregated energy use, on environmental pollution in the top recipient countries for remittances

Abstract Foreign remittance has become an essential source of wealth in recent decades, with far‐reaching effects on various economic indices and CO 2 emissions. This research examines the impact of remittances and disaggregated energy consumption on CO 2 emissions in an ‘Environmental Kuznets Curve (EKC)’ framework utilising a global sample of 46 top remittance‐receiving countries during 1996–2020. The study confirms the EKC proposition and demonstrates that a decline in CO 2 emissions is connected to remittance, renewable energy use and financial development. Additionally, our results stand up to various robustness tests, ensuring the reliability of our findings. Our research suggests that to reduce the adverse effects of non‐renewable energy on environmental quality, governments, regulators and other stakeholders should implement rigorous market regulations and allocate substantial financial resources to R&D for innovating environmentally friendly production technologies. The government may also provide incentives for importing environmentally friendly production tech, such as tax rebates and subsidies. Lastly, foreign remittance and renewable energy are two tools governments may employ to cut CO 2 emissions and improve environmental quality.