Sustainable cities and energy transition: Unraveling the role of financial stability

Energy consumption is considered vital for driving economic activities. However, the reliance on fossil fuels has created environmental degradation and energy security issues. The panacea of all these problems is to shift from dirty to clean energy sources. The role of the financial sector is vital because a stable and modernized financial industry can provide loans and funds for renewable energy consumption. Therefore, this study's main goal is to evaluate the influence of financial stability and smart urbanization on the renewable energy transition in BRICS countries from 1996 to 2023. Thus, we have resorted to the quantile ARDL model that is suitable for investigating the relationship across various quantiles. The estimated coefficient of financial stability and smart urbanization suggests that both these factors boost renewable energy consumption at most quantiles in the long run; however, in the short run, smart urbanization don’t exert any noticeable influence on renewable energy use. The model's outcomes confirm that estimated coefficients of financial stability are favorably linked to renewable energy consumption across all quantiles in the short run. Our policy recommendations aim to support the transition towards a more sustainable and resilient energy system in these countries, which will contribute to achieving global climate goals and improve citizens' quality of life.