Does political risk drive environmental degradation in BRICS countries? Evidence from method of moments quantile regression

Abstract

As a contribution to the political risk–environmental degradation literature, this study examines whether political risk drives environmental degradation in a multivariate framework. To achieve our study objective, we employed the method of moments quantile regression (MMQR) approach to analyze the effect of renewable energy use, economic growth, political risk, and globalization on quantiles of carbon emissions. The study utilized dataset stretching between 1990 and 2018 to investigate this interrelationship in the BRICS nations. The results generated from the MMQR mimic those of the three heterogeneous linear panel estimation techniques conducted (for robustness check), in terms of coefficient sign, magnitude, and significance. Using the MMQR technique, empirical results show that across quantiles (0.1–0.90), political risk, economic growth, and globalization positively affects environmental degradation. Renewable energy consumption, on the other hand, curb environmental degradation across all quantiles (0.10–0.90). Furthermore, the outcomes of the FMOLS, DOLS, and FEOLS corroborated the MMQR outcomes. In addition, the outcomes of the Dumitrescu-Hurlin panel causality revealed that renewable energy use, political risk, economic growth, and globalization can significantly predict CO2 emissions in the BRICS nations. The findings offer intuition for policymakers to lessen CO2 emissions in BRICS nations via diversification and clean energy technologies such as carbon capture and storage.