Balancing Employment and Environmental Goals: Evidence from BRICS and Other Emerging Economies, 1991–2020

Abstract

This paper examines how emerging markets balance the seemingly conflicting objectives of higher employment generation and improved environmental quality, with particular attention to the pivotal roles of trade openness and natural resource endowments. Utilizing a balanced panel dataset from 20 emerging economies that include all BRICS nations (except Ethiopia) and 10 other major emerging economies such as Mexico, Malaysia and Thailand spanning 1991–2020, the analysis applies the cross-section augmented autoregressive distributed lag (CS-ARDL) model to estimate both short- and long-run relationships. The findings indicate that increased trade openness and greater natural resource rents do not intensify the employment–environment trade-off; instead, they may facilitate simultaneous improvements in both areas, resulting in a win–win scenario. The results show that effective trade and resource management policies can reduce conflicts between unemployment and environmental issues, benefiting both the economy and the environment. This study also highlights the importance of integrated policies that connect trade liberalization, resource governance, and sustainability, offering useful guidance for emerging economies aiming for the Sustainable Development Goals (SDGs).