Assessing South Asia's environmental‐economic nexus: Green investments, green electricity and green technology innovation through combined quantile regression

Abstract Despite substantial economic growth, South Asian countries face worsening environmental degradation, raising concerns about the balance between development and sustainability. While previous studies have explored green initiatives and financial development separately, few have examined their combined and interactive effects using distribution‐sensitive approaches. This study addresses this gap by analyzing the impacts of green electricity, green investments, green technology innovation, and financial development on CO 2 emissions across South Asia from 2003 to 2023. Utilizing quantile regression and cross‐quantilogram methods, the study captures heterogeneous and asymmetric effects across varying emission levels. Quantile regression effectively reveals how these relationships differ beyond average trends, while the cross‐quantilogram technique uncovers dynamic spillovers and temporal causality among variables. Findings indicate that green electricity and green technology innovation significantly reduce CO 2 emissions, whereas financial development, particularly in energy‐intensive sectors, tends to increase them. However, the interaction between green electricity and innovation enhances environmental sustainability, and financial development supports green innovation by easing funding constraints. The study also identifies bidirectional causality between emissions and their drivers, underscoring the importance of dynamic, adaptive policymaking. This research contributes to the COP29 and Sustainable Development Goals (SDGs) by providing region‐specific policy insights to support sustainable growth in emerging economies.