Open AccessExploring the Relationship between Islamic Financial Development, Energy Consumption, and Environmental Quality
Author(s) -
Muhamad Abduh,
Witrie Annisa Buys,
Siti Aishah Abdul Aziz
Publication year - 2022
Publication title -
international journal of energy economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.449
H-Index - 33
ISSN - 2146-4553
DOI - 10.32479/ijeep.11943
Subject(s) - islam , islamic finance , energy consumption , consumption (sociology) , quality (philosophy) , proxy (statistics) , environmental degradation , environmental quality , business , finance , economics , environmental economics , geography , engineering , political science , computer science , social science , ecology , philosophy , archaeology , epistemology , machine learning , sociology , law , electrical engineering , biology
The relationship between financial development, energy consumption and the environment has been a popular topic in the last three decades. However, a minimal number of studies have been done within the Islamic finance framework despite its fifty years of establishment. This study aims to fill that gap by exploring the impact of Islamic financial development on energy consumption and environmental quality. Total financing and financial access are the two variables to represent Islamic financial advancement while millions tonnes of oil equivalent and CO2 emission as the proxy for energy consumption and environmental quality respectively. Focusing on six world top Islamic finance countries from 2013 to 2018, the findings show that Islamic financial development contributes significantly to the increase in energy consumption and the degradation of environmental quality.