Abstract
This study examines financial development, economic growth, energy consumption, trade openness, urbanization, and environmental degradation in 47 Belt and Road Initiative (BRI) countries from 1980 to 2022. Panel unit root tests (IPS, LLC, PP, and ADF) ensured data correctness and stationarity. Three co-integration tests examined the variables' connections. Difference of means (DOLS) and functional moment (FMOLS) tests examined BRI economies' co-integration. A paired Granger causality test found bidirectional correlations between CO2 emissions, urbanization, financial development, economic growth, and the creation of gross fixed capital. Trade openness only correlated with ecological well-being. International study suggests regional, state, and federal policy implications. The empirical investigation used a panel causal heterogeneous test, dynamic ordinary least squares(DOLS), and fully modified ordinary least squares (MOLS) with fixed and random effects. Trade openness negatively affected CO2 emissions, but all other regressors positively affected environmental quality. Good governance and country-specific policies are needed to maximize BRI advantages. Despite conflicting energy statistics, the study found that economic development hurt the environment in all 47 countries. Industrialized nations generally use renewable energy, which minimizes ecological issues, hence their omission from the BRI full panel may explain the negative coefficient. Since most BRI economies are in emergent and growing countries, environmental preservation and renewable energy technologies need more time and money. Instead of coal, the Chinese government and other BRI nations are urged to invest in wind, hydro, solar, and biomass. Sharing green energy technology might help BRI economies. Cross-national urbanization strategy should incorporate eco-friendly solutions. The panel and governments may utilize the paper's substantial policy recommendations.