Innovation, renewable energy, and CO2 emissions in BRICS: Evidence for sustainability indicators

Abstract

This study investigates the dynamic relationship between technological innovation (INNOV), renewable energy (RE) consumption, sustainable economic growth (SEG), and CO₂ emissions in BRICS countries over the period 1990–2024. Employing a comprehensive panel dataset and advanced econometric techniques, including cross-sectional dependence tests, second-generation unit root tests, panel cointegration, and the Panel ARDL (PMG) estimator, the analysis captures both short- and long-run interactions among the variables. The empirical findings reveal that RE consumption significantly reduces CO₂ emissions, highlighting its critical role in environmental sustainability. Technological INNOV also contributes to emission reduction by improving energy efficiency and facilitating the transition toward cleaner production processes. Conversely, economic growth (EG) is found to increase CO₂ emissions in the short run, reflecting the environmental cost of industrial expansion; however, in the long run, it supports the Environmental Kuznets Curve (EKC) hypothesis, in which environmental degradation (ED) declines after a certain income threshold.

Additionally, causality analysis indicates bidirectional relationships between INNOV and emissions, and unidirectional causality from RE to environmental quality. The study underscores the importance of integrating green INNOV and RE policies to achieve sustainable development (SD) in BRICS economies. These findings provide valuable insights for policymakers aiming to balance EG with environmental protection.