Pathway to sustainable consumption and production: The role of climate-related development finance, digitalization, and financial development on material productivity and energy intensity of developing countries

Improving material productivity (MP) and energy intensity (EI) is a crucial tool for sustainable consumption and production targets of SDGs. However, the diverse effects of climate-related development finance (CDF), digital infrastructure (DI), and financial development (FD) on MP and EI in developing countries (DCs) remain underexplored. Therefore, employing the method of moments quantile regression (MMQR) approach, this study examines the heterogeneous effects of CDF, DI, and FD on MP and EI across 87 DCs from 2000 to 2020. Also, the effects of CDF and DI on MP and EI are explored, considering the FD heterogeneity. The results imply that CDF, FD, and DI have beneficial effects on MP and energy efficiency (EE). Specifically, DCs with the higher distribution of MP benefit more from CDF and FD, with CDF coefficients rising from 0.004 to 0.019 across quantiles and FD estimates increasing from 0.224 to 0.391 from medium to the higher quantile. Conversely, DCs with lower EI benefit more from CDF and FD, as indicated by the coefficients of CDF and FD, ranging from -0.017 to -0.012 from 20th to 80th quantile and -0.569 to -0.233 from 40th to 60th quantile, respectively. Besides, DCs with higher distribution of MP and EI drive more gain from DI improvement. Besides, the effects of CDF and DI are influenced by variations in FD. These findings have vital implications for developing prudent financial and digitalization policies to promote MP and EE in DCs, congruent with SDG-7.3, SDG-8.4, and SDG-12.2 for improving energy and resource efficiency and management.