Abstract
Abstract This study delves into the impact of banking sector development (BSD), renewable energy consumption (REC) and economic growth (EG) on environmental quality (EQ), using the load capacity factor (LCF) in Sudan. Utilizing time series data from 1990 to 2018 and the Autoregressive Distributed Lag (ARDL) method, this research aims to explore both short-term and long-term dynamics, and cointegration, to provide a detailed understanding of these relationships. The study's primary objective is to elucidate the effects of BSD, REC, and EG on Sudan's EQ through the LCF metric and to test the Load Capacity Curve (LCC) hypothesis. The results indicate that the squared values of per capita GDP (long-term) and REC (short- and long-term) contribute to an increase in Sudan's LCF, thereby enhancing EQ,while BSD and per capita GDP negatively affect EQ, thus confirming the LCC hypothesis. Sudan authorities are urged to prioritize environmentally friendly economic policies, sustainable urban development, and the transition to renewable energy sources. However, the revelation that BSD diminishes environmental sustainability suggests a reevaluation of the financial sector's role. Encouraging green technologies could amplify the LCF and mitigate environmental degradation, enabling Sudan to create a sustainable environment by promoting renewable energy investments and long-term GDP per capita growth while curbing financial expansion. This research provides a critical framework for policymakers to create strategies that balance economic development with ecological preservation, ensuring Sudan's long-term sustainability. Graphical Abstract