Determinants of CO2 emissions in the BRICS. A dynamic Panel ARDL approach

Abstract

This paper examines the effects of Foreign Direct Investment, Economic Growth, Trade Openness, Energy Consumption, and Renewable Energy on CO2 Emissions in BRICS nations. This study employs the panel ARDL model to investigate the short- and long-term effects of an association between variables. The PMG estimator has shown itself to be more trustworthy and performs at a higher level of efficiency, leading us to the conclusion that it is the preferable technique. Because the error correction parameter, also known as the adjustment coefficient, is negatively significant, the findings demonstrate that there is a long-term relationship. According to the paper's findings, there are both short-term and long-term effects of free trade and energy consumption on CO2 emissions. In the short run, FDI has positive impact on CO2 emissions, whilst renewable energy has detrimental effect. Surprisingly, the BRICS countries have not shown a correlation between economic development and carbon dioxide emissions. These findings may encourage policymakers in these countries in better recognizing the complexities of this occurrence, which in turn can assist direct future choices about this growing international security danger.