How do governance indicators, trade openness, industrialization, and population growth affect environmental degradation in BRICS Nations?

Abstract

Abstract Against the backdrop of the dismal performance of BRICS nations in terms of governance, this study examines the relationship between governance indicators and carbon emissions. By employing DOLS and FMOLS cointegration techniques from 1996 to 2022, we find that effective governance helps in reducing environmental pollution. Specifically, indicators namely government effectiveness, political stability, the rule of law, voice and accountability, regulatory quality, and control of corruption show a favourable impact in mitigating carbon emissions. Additionally, our findings reveal that both foreign direct investments and trade openness contribute positively in lowering carbon emissions by introducing advanced technologies and sustainable practices. Conversely, rapid industrialization and population growth exacerbate carbon emissions due to increased reliance on fossil fuels and higher energy demand. Our study underscores the need for enhanced governance, green investments, and stringent environmental regulations to balance economic growth with environmental sustainability in BRICS nations.

Keywords

• BRICS
• Carbon emissions
• Governance
• DOLS
• FMOLS