Inclusive Finance and the Carbon Footprint: Pathways Through Energy and Innovation in Sub‐Saharan Africa

ABSTRACT This study examines the impact of financial inclusion on carbon intensity in 35 Sub‐Saharan African countries from 2000 to 2022. Using a composite financial inclusion index derived via principal component analysis, the study employs fixed effects, instrumental variables, and augmented mean group estimators to ensure robustness. The findings reveal that financial inclusion significantly reduces carbon intensity, with renewable energy consumption and technological innovation acting as key mediating channels. Heterogeneity analysis highlights stronger effects in middle‐income and Southern African countries, underscoring the importance of regional development dynamics. The results underscore the roles of inclusive finance in supporting climate mitigation and low‐carbon development pathways in Africa. The findings align with regional policy priorities and sustainable development objectives, suggesting that financial access can facilitate a just energy transition to low‐carbon growth. The results suggest that promoting financial access can support a just energy transition and low‐carbon growth in Africa. Policy recommendations target regulators, development partners, and financial institutions seeking to align financial deepening with environmental and energy planning across the continent.