4.7 Article

The role of natural resources, renewable energy, and globalization in testing EKC Theory in BRICS countries: Method of Moments Quantile

Journal

ENVIRONMENTAL SCIENCE AND POLLUTION RESEARCH
Volume 29, Issue 16, Pages 23677-23689

Publisher

SPRINGER HEIDELBERG
DOI: 10.1007/s11356-021-17557-5

Keywords

Natural resources; Renewable energy; Globalization; BRICS; Quantile

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This study validated the existence of the Environmental Kuznets Curve (EKC) hypothesis in BRICS countries, showing that environmental degradation follows an inverted U-shaped curve with economic growth. The research found that natural resources have a direct impact on environmental degradation, while renewable energy has a negative impact, suggesting the promotion of renewable energy utilization in BRICS countries.
This paper aims to validate the EKC hypothesis for BRICS countries, in the presence of natural resources, renewable energy, and globalization factors. FMOLS, DOLS, Method of Moments Quantile Regression (MMQR), and heterogeneous panel causality tests have been applied on the BRICS panel from 1990 to 2014. According to FMOLS and DOLS techniques, the EKC hypothesis does exist in BRICS countries in the presence of alternative energy resources and globalization, whereas quantile level analysis does not support globalization as a significant factor for environmental degradation. Quantile regression validates the EKC hypothesis with a direct association of natural resources and inverse association of renewable energy with environmental degradation. Heterogeneous panel causality also confirms the bidirectional Granger causality between all the variables and CO2, except globalization, which means that panel causality is endorsing the results of MMQR. Thus, it is recommended to encourage the usage of renewable energy resources in BRICS countries.

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