Impact of renewable energy, financial globalization, and technological innovation on environmental sustainability in BRICS

The rapid economic growth and escalating energy requirements in recent decades have resulted in environmental degradation, giving rise to global warming issues that are now escalating to the point of global boiling. To guide aligned policies for BRICS countries, the current research assesses the effects of economic growth, renewable energy utilization, financial globalization, green innovation and digitalization on consumption-based carbon emissions (CCO2) from 1990 to 2019. The study applies Common Correlated Effects Mean Group Estimator (CCEMG) and Augmented Mean Group Estimator (AMG) estimation techniques. Results demonstrate that a 1% increase in economic growth is associated with a 0.73% rise in CCO₂ emissions for BRICS as a whole, while a 1% increase in renewable energy consumption leads to a 0.75% reduction in CCO₂. Green innovation and digitalization also show negative associations, with a 1% rise in green innovation reducing emissions by 0.041% and digitalization by 0.00036%. Conversely, financial globalization is positively associated with CCO₂, with a 1% increase linked to a 0.12% rise in emissions. BRICS countries possess substantial potential in renewable energy sources, and transitioning from fossil fuels to renewables can uphold environmental sustainability. Additionally, leveraging financial globalisation to augment investments in green technology, renewable energy and sustainable digital infrastructure with a focus on green growth prioritization can augment green employment and sustainable development. The study is the first of its kind that uses novel second-generation panel cointegration and econometric techniques that capture the cross-sectional dependency and slope heterogeneity.