Does financial openness drive the role of renewable energy to shape a low carbon future? Evidence from BRICS-T economies

The global shift from fossil fuels to cleaner energy sources has become imperative, especially for developing economies striving to balance growth with environmental preservation. Renewable energy offers a viable solution, but its effectiveness is often constrained by financial limitations. This paper examines the effect of financial openness on the environmental benefits of renewable energy, by estimating the independent and combined effects on carbon emissions. For this purpose, data from BRICS-T economies were gathered over the period of 1999-2022. The study applied method of moment quantile regression (MMQR) to empirically estimate the results across various quantiles. The findings indicate that renewable energy is effective in reducing CO2 emissions across the three quantiles. The relationship between financial openness and CO2 is positive across the entire quantiles. The interaction terms between Renewable energy and financial openness also appears with the positive sign. It explains that financial transparency results in a more efficient use of renewable energy by accelerating the process of global transition to a fossil-free world This research has useful policy implications.