Socio-economic and technological drivers of sustainability and resources management: Demonstrating the role of information and communications technology and financial development using advanced wavelet coherence approach

Inclusive and sustainable growth can only be ensured through socio-economic and technological transformation. In this regard, this study offers a new perspective on the dynamic interrelationship between financial development (FD), economic growth (GDP), information and communication technologies (ICT), education (EDU), and CO2 emissions (CO2) in the United Kingdom. The paper employs the Breitung and candelon (2006) causality and wavelet approaches to assess these connections using data from 1990Q1 to 2019Q4. The wavelet coherence is employed to explore the coherence and lead/lag interrelationship between CO2 and the independent variables over dissimilar time scales. Finally, the Breitung and candelon (2006) causality test is used as a robustness check for the wavelet coherence approach. The wavelet coherence (WTC) revealed: (a) negative coherence between CO2 and GDP with GDP leading; (b) negative co-movement between CO2 and financial development with financial development leading; (c) positive co-movement between CO2 and energy use with energy use leading; (d) negative co-movement between ICT and CO2 with ICT leading; and (e) negative co-movement between education and CO2 with education leading. The outcomes of the multiple wavelet and partial wavelet as well as the Breitung and candelon (2006) causality comply with those of the wavelet coherence. Since a connection between CO2 and financial development and ICT is found in the short-medium term, our findings imply that policymakers should focus on investing in technologies and financial markets. In addition, the report recommends that emphasis be placed on green energy policies, as growing pollution levels from fossil fuels impede long-term productivity.