Citation: Ghouse, G.; Aslam, A.; Bhatti, M.I. The Impact of the Environment, Digital–Social Inclusion, and Institutions on Inclusive Growth: A Conceptual and Empirical Analysis. Energies 2022, 15, 7098. https://doi.org/10.3390/ en15197098 Academic Editor: Luigi Aldieri Received: 15 August 2022 Accepted: 21 September 2022 Published: 27 September 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). energies Article The Impact of the Environment, Digital–Social Inclusion, and Institutions on Inclusive Growth: A Conceptual and Empirical Analysis Ghulam Ghouse 1 , Aribah Aslam 1 and Muhammad Ishaq Bhatti 2,3, * 1 Economics Department, University of Lahore, Lahore 55150, Pakistan 2 Department of Finance, S P Jain School of Global Management, Lidcombe, NSW 2141, Australia 3 Department of Accounting, Data Analytics, Economics and Finance, La Trobe Business School, La Trobe University, Melbourne, VIC 3083, Australia * Correspondence: ishaq.bhatti@spjain.edu.au or i.bhatti@latrobe.edu.au Abstract: Though the literature on inclusive growth is rich, further well-founded studies are required on the issue of sustainable inclusive growth. This paper seeks to summarize the role of environmental degradation in inclusive growth based on carbon dioxide emissions, and its interaction with factors such as social inclusion, digital inclusion, and institutions. One of the findings derived from the generalized method of moments (GMM) model is that sustainable inclusive growth can be achieved in all three income groups from the global data while focusing on institutional quality, digital inclu- sion, and social inclusion. Simultaneously, the harmful effects of carbon dioxide emissions can be circumscribed. The major recommendations of this study are that efforts to achieve sustainable inclu- sive growth should combine mutually reinforcing policies, namely: (i) promoting environmentally focused sustainable inclusive growth with socio-digital inclusivity; (ii) ensuring a strong institutional playing field for achieving inclusive growth; and (iii) strengthening macroeconomic policies, which means controlling inflation, and enhancing trade openness and literacy levels. Keywords: inclusive growth; social inclusion; digital inclusion; environmental degradation; CO 2 emissions; generalized method of moments 1. Introduction Over the next few years, it is assumed that the increasingly globalized world will experience tremendous economic growth, despite the current serious challenges that it faces. Making progress means overcoming the interconnected issues of environmental degradation, socio-digital inclusion, and inclusive growth. First, the world needs to meet the challenges associated with growing concerns about the state of the environment [1,2]. It is projected that the world’s increasingly unsustainable population will increase from 7 billion in 2012 to 9.3 billion by 2050 [3]. Almost 50% of the population is growing in the Sub-Saharan Africa region alone [4]. With the ever-increasing number of people, countries will fight for food, water, jobs, natural resources, and shelter at the cost of damaging the environment [5]. The demand for more resource-intensive foods such as meats and vegetable oils will grow, and it requires intensive measures to protect the environment. Unchecked population growth will also increase industrial activities, carbon dioxide, and other harmful gas emissions, leading to depletion of the ozone layer and, subsequently, environmental degradation [6–8]. Such harmful gasses in environments, coupled with growing industrialization, urbanization, and populations, has serious repercussions for all humans, flora, and fauna [9,10]. Currently, carbon dioxide emissions are rising at a fast rate globally, posing a major threat to all forms of life (see Figure 1). Energies 2022, 15, 7098. https://doi.org/10.3390/en15197098 https://www.mdpi.com/journal/energies