Growth dynamics and sustainability of BRICS economies under climate uncertainty

Abstract

This study examines the growth of BRICS economies under climate uncertainty within an interconnected setting. Using quarterly data from the first quarter of 2011 to the third quarter of 2023, we construct a climate-uncertainty-adjusted GDP growth (CUG) index to assess the role of the Paris Agreement in sustainable growth. We evaluate each economy's tolerance to climate uncertainty in sustaining growth and employ a commonality framework to disentangle shared and country-specific contributions to sustainable growth. The empirical findings reveal an enhanced CUG during the post-Paris Agreement, underscoring the Agreement's role in advancing sustainable growth. Furthermore, the network diagnostics provide evidence of strengthened economic performance conditional on climate uncertainty, thereby highlighting the Agreement's efficacy in mitigating the adverse effects of climate-related risks. These findings help policymakers judge whether BRICS economies advance toward climate-aligned growth consistent with treaty goals and inform stakeholders about the implications of climate mandates for economic objectives.