The influence of economic complexity processes and renewable energy on CO2 emissions of BRICS. What about industry 4.0?

This study analyses the relationship between carbon dioxide emissions per capita, the economic complexity index, renewable energy, and inward foreign direct investment using panel data for the BRICS countries from 1995 to 2020. Empirical results confirm that the environmental Kuznets curve is fulfilled, with a positive but decreasing contribution of economic development on environmental deterioration, to the point that neutrality on CO2 emissions can be achieved in the long term. In addition, the results confirm, in this case, the Pollution Haven Hypothesis, that is, the set of BRICS economies chooses to apply regulations that do not respect the environment. The results of other econometric studies support this study, pointing to long-run cointegration. The unit root tests and the variance inflation test also point to stationarity at the first difference and a lack of multicollinearity, respectively. Finally, given the scarcity of empirical studies, this study adopts an incipient methodology to approximate the impact of the technologies associated with Industry 4.0 on carbon emissions, obtaining evidence that their effect on environmental deterioration is very moderate. In addition, the results suggest that, in the long term, these technologies can contribute to achieving the neutrality of polluting emissions.

Automated summary

This study examines the relationship between carbon dioxide emissions per capita, economic complexity index, renewable energy, and inward foreign direct investment in the BRICS countries from 1995 to 2020. The findings confirm the existence of the environmental Kuznets curve, indicating a positive but decreasing impact of economic development on environmental deterioration, with the potential for achieving CO2 emissions neutrality in the long term. Additionally, the study supports the Pollution Haven Hypothesis, suggesting that BRICS economies choose to prioritize economic growth over environmental protection. The results also indicate the potential of Industry 4.0 technologies in contributing to the neutrality of polluting emissions.