Impact of energy end-uses and efficiency indicators on the environmental policy stringency index

Abstract

Energy end-uses and efficiency indicators express the extent of the environmental policy stringency index. Knowing how energy is used in different sectors enables formulating and implementing appropriate environmental policies targeting specific end-use sectors for energy-efficient strategies that support sustainable development goals. Integrating digital technology in energy systems further enhances efficiency by enabling smarter monitoring, management, and optimization of energy use across sectors, reinforcing environmental policies' effectiveness. This paper examines the impact of energy production and carbon emission indicators on the environmental policy stringency index in BRICS countries from 2000 to 2023, using total primary energy supply, energy intensity level of primary energy, and electricity production from renewable sources as control variables. The long-run estimates of Arellano–Bond dynamic panel-data estimation and robust random effect GLS regression with AR(1) disturbances indicate that energy production indicators, total primary energy supply, and electricity production from renewable sources are positively associated with environmental policy stringency and increased environmental policy stringency. Carbon emissions indicators and the energy intensity level of primary energy are negatively related to environmental policy stringency and decrease environmental policy stringency. The research includes interaction terms to investigate whether environmental policy stringency affects the connection between renewable energy generation and carbon emissions on energy intensity. Interaction models help research teams understand how dependent relationships function in the energy-environment system. Policymakers in the BRICS countries should integrate energy production indicators into policy frameworks, emphasizing renewable energy, energy efficiency, and carbon emission reduction to guide sustainable development, foster stricter environmental policies, and effectively address climate change challenges.