Building a Green Future: The Impactof Global Value Chains and Economic Fitnesson CO<sub>2</sub> Emissions in BRICS Nations

Climate change is a major challenge hindering economic efforts to maintain a balance between economic growth and the environment.BRICS economies, a group of five emerging nations, are major emitters of CO 2 emissions that cause climate change.Their trade patterns and production structures also contribute to their CO 2 emissions.Therefore, the current study analyzed the individual and synergistic impact of gross value chains (GVCs) and economic fitness (EF) on CO 2 emissions in light of the Environmental Kuznets Curve (EKC) model.The data were cross-sectionally dependent and heterogeneous.Therefore, comprehensive econometric techniques, including panel-corrected standard error, feasible generalized least squares, and robust standard error methods, were applied to the panel of BRICS economies from 1995-2018.The findings of the study revealed i) the existence of the EKC hypothesis in BRICS economies; ii) the positive and significant individual impact of GVCs on CO 2 emissions while holding the EKC hypothesis; iii) the negative and significant individual impact of EF on CO 2 emissions; iv) the negative and significant synergistic impact of GVCs and EF (GVCs*EF) on CO 2 emissions in the presence of the EKC hypothesis.The most effective incentive policies, such as tax reductions and financial awards, encourage the local industries involved in GVCs to lower their emissions.Moreover, retrofitting the existing production infrastructure must be executed to increase the economic fitness level of economies, which lowers the positive cause of GVC emissions by fostering the adoption of clean and energy-efficient technologies.