The Evolving Dynamics of Climate Change in Developing Nations: Integrating Supply Chain Digitalization and Green Technology Into Policy and Practice

ABSTRACT

Climate change is a growing area of research, particularly in developing nations, which are considered major stakeholders in energy demand and significantly contribute to global emissions. This highlights the need for timely emissions governance strategies to combat climate change and align with the goals of the Paris Climate Agreement in developing nations. Consequently, our study investigates the effects of supply chain digitalization and green technology innovation on climate change, mediated by renewable energy integration and moderated by financial development in developing economies. The cointegration analysis reveals a long‐run relationship among these variables. However, the method of moments quantile regression (MMQR) technique shows that supply chain digitalization worsens climate change, whereas green technology innovation improves it across all quantiles. Our results are confirmed by robustness analysis, including bootstrap quantile regression (BQR), quantile regression (QR), Driscoll–Kraay standard error (D‐KSE), and system‐GMM (S‐GMM). Notably, the mechanism effect indicates that supply chain digitalization improves renewable energy integration, thereby mitigating climate change. Similarly, the moderating analysis shows that financial development plays a contingent role in the relationship between supply chain digitalization and climate change, highlighting that when supply chain digitalization aligns with financial development, it helps alleviate climate risk. This research proposes an analytical framework for supply chain digitalization and green technology innovation to mitigate climate risk. It offers significant policy implications for stakeholders in developing nations to attain the Sustainable Development Goals.