Exploring the environmental impacts of biofuels: Do affluence, green technological innovation, and green finance matter for top biofuel abundant economies?

This study uses Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) framework, which is widely used in environmental and sustainability research to explore the impact of biofuel production on CO2-emissions (CO2-EM) in the selected biofuel-abundant economies (USA, Brazil, Indonesia, China, Germany, Argentina, India, Netherland, Thailand, and France) from 1990 to 2021 by including the mediating role of affluence, technology, green finance and coal usage. We use the CS-ARDL method to study the correlation between variables, cross-sectional dependency and their heterogeneity level. Our analysis has unveiled several critical insights into the dynamics of environmental sustainability and economic development. Notably, it is concluded that economic affluence, population size, and coal usage exert positive effects on CO2-EM, especially in less affluent economies, underscoring the challenges associated with balancing economic growth and environmental concerns. Conversely, green finance and green technological innovation exhibited negative associations with CO2-EM, suggesting that investments in sustainable initiatives and technological advancements play pivotal roles in reducing carbon emissions. Furthermore, we observed variations in the strength of these relationships across different quantiles of economic development, highlighting the importance of tailoring environmental policies to the specific needs and contexts of developing/transition economies.