Do technological innovation, natural resources and stock market development promote environmental sustainability? Novel evidence based on the load capacity factor

As several nations currently expect it, renewable energy has the capacity to play a significant role in energy transition initiatives. Without considerably increasing renewable energy consumption, achieving sustainable development and curbing global climate issues would become more difficult. This research explores the impact of renewable energy, technological innovation, stock market development, and natural resources on load capacity factor (LCF) in BRICS-T nations. This paper utilized second-generation techniques between 1990 and 2018. These approaches are beneficial for generating complete and trustworthy estimates by accounting for CD, parameter endogeneity, serial correlation and slope heterogeneity, which are overlooked in traditional approaches. The results from the Cross-sectional-autoregressive-distributed lag (CS-ARDL) show natural resources led to a negative effect on environmental quality by decreasing the level of LCF by 0.1814% in the long run and 0.1409% in the short run. Besides, the outcomes illustrated that a 1% significant and positive increase in stock market development negatively affects the environmental quality by decreasing the level of LCF by 0.1409%. However, regression results demonstrated that natural resources contribute to decreased ecological quality while renewable energy consumption enhances environmental quality. The empirical outcomes of the causality test illustrated uni-directional causality from GDP to load capacity factor. In addition, the results showed that there is undirectional causality from renewable and non-renewable energy utilization and stock market development to LCF. The paper provides beneficial policy recommendations for achieving equitable and sustainable development in BRICS-T nations.

Automated summary

Renewable energy has a significant impact on the load capacity factor (LCF) in BRICS-T nations, while natural resources and stock market development have a negative effect on environmental quality. The study shows that renewable energy consumption improves environmental quality, but the extraction of natural resources and the development of the stock market lead to a decrease in environmental quality.