Digital Financial Services And Environmental Sustainability: Post-Pandemic Pathways To Green Inclusion

Abstract

The COVID-19 pandemic amplified the use of digital financial services (DFS)- contactless payments and mobile wallets, algorithmic credit, and digital micro-insurance. The paper draws out the emerging and post pandemic evidence on how DFS can improve environmental sustainability and financial inclusion (green inclusion). We consider six paths to clean-energy access, including pay-as-you-go (PAYGo) models; green-innovation diffusion; climate-risk transfer and resilience; carbon-conscious consumer nudges; greening capital markets; and digital measurement, reporting, and verification (dMRV); and balance these benefits with rebound and distributional risks (e-waste, energy-intensive crypto, and overspending externalities of cashless payments). We end by offering a design agenda to regulators and providers to make DFS consistent with national decarbonization and adaptation objectives.