Achieving environmental quality in the Mediterranean region: the role of financialization, human capital and energy efficiency

The Sustainable Development Goals (SDGs) of the United Nations include environmental quality as one of the compelling cardinal goals. However, the process of achieving environmental quality requires accessibility to low-cost financial resources, high level of knowledge economy and energy efficiency which previous studies have failed to capture. Therefore, this study provides a fresh insight by capturing the role of financialization, human capital and energy efficiency in addressing the environmental question in the Mediterranean region. The study employs Cross-Sectional Autoregressive Distributed Lag (C-S ARDL) model and panel Dumitrescu-Hurlin causality. The results showed that financial development and economic exacerbate ecological footprint thereby dampening environmental quality in the Mediterranean region, while human capital and energy efficiency enhance environmental quality through a reduction in eological footprint. The study recommends promoting financial instruments that direct capital toward green initiatives, as well as encouraging training and educational initiatives that focused on environmental sciences and sustainable development in order to improve human capital. The study recommends promoting financial instruments that direct capital to green initiatives and discourage capital investment in polluting companies. Enacting laws and incentives that encourage investment in sustainable practices and renewable energy, as well as education and training initiatives focusing on environmental sciences and sustainable development to improve human capital.