The Impact of Energy Transition on CO2 Emissions in BRICS Nations: Evidence from Linear and Nonlinear Approaches

The impact of the shift in energy systems on CO2 emissions in BRICS nations plays a crucial role in mitigating climate change and advancing sustainable development goals. This study examines how changes in the composition of the energy mix influence CO2 emissions in BRICS countries, and further evaluates the relationships among energy transition, economic growth, urbanization, trade openness, population growth, and CO2 emissions. Drawing on panel data from 1990 to 2023 and applying both linear and nonlinear PMG models, the study investigates how energy transition asymmetrically influences CO2 emissions in both the short and long run. In the short run, the linear PMG results show that energy transition helps reduce CO2 emissions in the UAE, South Africa, India, and Brazil, while it is associated with increased emissions in China, Egypt, Ethiopia, Indonesia, Iran, and Russia, while also decreasing on average for all in the long-run period based on the linear PMG. The impact of energy transition on CO2 emissions in BRICS nations is complex and heterogeneous from the nonlinear PMG. In the short run, positive energy transition shocks reduce emissions in most countries (UAE, Brazil, China, Egypt, Ethiopia, and South Africa), but increase emissions in others (Indonesia, India, Iran, and Russia). Negative shocks also have mixed effects. However, in the long run, positive energy transition shocks lead to a 0.019% decrease in CO2 emissions, while negative shocks increase emissions by 0.018%, indicating a nuanced relationship between energy transition and emissions. Urbanization, population growth, and economic expansion exhibit diverse effects on CO2 emissions across the BRICS group. The results imply that policymakers should implement a comprehensive policy mix that elevates the role of energy transition, sustainable urban development, and green investment to curb CO2 emissions. Tailored, country-specific measures are required to account for national circumstances and the asymmetric links between energy transition and emissions. The study underlines the importance of international collaboration in tackling climate change and advancing sustainable development, and stresses that customized strategies for each BRICS member are essential in order to achieve long-term environmental sustainability.