The importance of the relationship between financial inclusion and carbon emissions has increased in light of the growing awareness of the adverse impacts of climate change on the environment and human health. Accordingly, this paper aims to examine whether financial inclusion, along with improvements in energy efficiency, can mitigate carbon dioxide emissions in Egypt during the period 1980–2023, using the STIRPAT framework. The NARDL model was employed to analyze the effect of banking financial inclusion, while the ARDL model was applied to assess the impact of market financial inclusion on carbon emissions. The results indicate the presence of a nonlinear relationship consistent with the Environmental Kuznets Curve (EKC) hypothesis, taking an inverted U-shape between institutional financial inclusion and per capita carbon emissions in Egypt. In contrast, the findings reveal that market-based financial inclusion exacerbates climate risks by increasing carbon emissions, implying that the policies implemented to promote market financial inclusion in Egypt have not achieved their intended environmental sustainability goals. On the other hand, improvements in energy efficiency and the expansion of renewable energy’s share in total energy consumption significantly contribute to reducing carbon dioxide emissions. Furthermore, gains in energy efficiency mitigate the linkage between financial inclusion and emissions by simultaneously lowering carbon emissions and fostering financial inclusion. Finally, the results suggest that economic growth, international trade, and urbanization help curb climate risks by reducing emission levels.