Kiran Z. Gillani ^1,2* Danial Z. Shafique ³ Muhammad Asif ⁴

• ¹ University of Okara, Okara, Pakistan
• ² Higher Education Commission, Islamabad, Islamabad, Pakistan
• ³ Harbin University, Harbin, Heilongjiang, China
• ⁴ Hunan University, Changsha, Hunan Province, China

Connecting over 60 countries and contributing to 30% of the world's gross domestic product, the Belt and Road Initiative-BRI is among the most ambitious infrastructure endeavours ever.Greater energy consumption results from increased economic activity, which in turn causes more environmental damage. Environmental issues are growing all over the world and the planet has suffered from serious environmental degradation throughout the years. There is a scarcity of research that provides an in-depth investigation of regional green innovation collaboration by combining green finance, environmental regulations, and green innovation performance. The study's findings are significant because they will benefit the BRI region, which is mostly made up of developing nations, by giving insightful information and therefore solving the knowledge gap. Therefore, this study aims to investigate the effect of green financing, green innovation, and energy consumption on environmental degradation with the mediating of trade openness in the context of the energy sector of CPEC under BRI. Panel data was gathered to conduct an analysis.The study employed a panel data collection methodology to examine the relationship between two countries, China and Pakistan, from 2013 to 2022. The information employed in this research was obtained from an extensive variety of secondary sources, including IRENA, OCED Statistics, and the Development Indicators of the World Bank. The researcher performed the statistical analysis for the investigation utilizing STATA.The findings of this research project indicate that green finance has a negative and statistically insignificant effect on environmental degradation. In a similar vein, green innovation exhibits a positive impact that is statistically insignificant. On the contrary, energy consumption exhibits a significant and positive relationship with environmental concerns. Added to that, environmental degradation is significantly and negatively correlated with trade openness in the context of the Belt and Road Initiative's China-Pakistan Economic Corridor (CPEC). It is recommended that the governments of Pakistan and China continue to support innovative and environmentally sustainable financing through incentive programs, such as the offering of interest rate subsidies for green loans.