Digital financial inclusion, the belt and road initiative, and the Paris agreement: Impacts on energy transition grid costs

Chishti, Muhammad Zubair; Xia, Xiqiang; Du, Anna Min; Özkan, Oktay

Abstract

We investigate how digital financial inclusion, the Belt and Road Initiative, and the Paris Agreement influence the energy transition grid cost. We propose two new Kendall and Spearman wavelet cross-quantile correlation methods and utilize data from June 1, 2018, to July 31, 2024. Our findings indicate that digital financial inclusion, the Paris Agreement, and artificial intelligence significantly reduce grid costs in the short and long run. Additionally, the Belt and Road Initiative has substantial potential to decrease grid costs, particularly during bullish market conditions in the long run. Conversely, GCOVOL significantly increases grid costs, especially in the long run.

Citation

Chishti, M. Z., Xia, X., Du, A. M., & Özkan, O. (2025). Digital financial inclusion, the belt and road initiative, and the Paris agreement: Impacts on energy transition grid costs. Finance Research Letters, 72, Article 106517. https://doi.org/10.1016/j.frl.2024.106517

• Journal Article Type: Article
• Acceptance Date: Nov 24, 2024
• Online Publication Date: Nov 26, 2024
• Publication Date: 2025-02
• Deposit Date: Nov 26, 2024
• Publicly Available Date: Nov 26, 2024
• Journal: Finance Research Letters
• Print ISSN: 1544-6123
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 72
• Article Number: 106517
• DOI: https://doi.org/10.1016/j.frl.2024.106517
• Keywords: Digital financial inclusion, grid cost, BRI, Paris Agreement, Wavelet Cross-Quantile Correlation