Driving toward climate neutrality in BRICS: Can environmental policy stringency, technological innovation, renewable energy, and digitalization make or mar the targets?

Abstract

The world economy is currently dealing with a constant increase in ecological damages, mostly as a result of continuous depletion of the nature's resources for human's economic and noneconomic uses. Efforts to enhance certain green environmental indicators in order to achieve sustainability have been driven by the necessity to bridge these disparities. The first empirical data addressing the question of whether environmental policy strictness, environmental technology, renewable energy, and digitalization contribute to or worsen ecological damages in the economies of the BRICS countries between 1990 and 2022 is presented in this study. The theoretical evidence emanates from the novel STIRPAT framework, which enables the incorporation of other control variables, such as urbanization, economic growth, foreign direct investment, and globalization. Second-generation estimators form the basis for the empirical verification. The results indicate that digitalization, renewable energy, and environmental technology all contribute positively to ecological well-being. However, stringent environmental regulations appear to have limited impact on advancing the BRICS countries. Nonetheless, strict environmental regulations seem to be ineffective in propelling the BRICS. Moreover, it is evident that globalization, economic growth, urbanization, and foreign direct investment all exacerbate ecological damage. The panel findings are supported by a nation-level analysis. Additionally, the model calculations identify one-way and two-way connections as the two causal pathways. The study's conclusions are utilized to propose policy recommendations.