Influence of growth and urbanization on CO2 emissions: The moderating effect of foreign direct investment on energy use in BRICS

This study analyses the relationship between foreign direct investment, economic growth, urbanization, energy use, and carbon emissions in Brazil, Russia, India, China, and South Africa (BRICS countries) between 1990 and 2014. According to the empirical results, both environmental Kuznets curve (EKC) and pollution haven hypotheses (PHH) are confirmed. Urbanization contributes to reducing carbon emissions, while energy use is one of the main driving forces of ascending carbon emissions. The main advance of this paper lies in the moderating effect of foreign direct investment and energy usage on carbon emission in the case of the BRICS. The empirical results confirm a dampening impact of foreign direct investment on energy use, generating a correction in carbon emission. Thus, structural transformations are highlighted with a positive influence on energy efficiency and sustainable growth. It is expected that policymakers must promote renewable sources and boost clean foreign industries in selected host countries.

Automated summary

This study analyzes the relationship between foreign direct investment, economic growth, urbanization, energy use, and carbon emissions in BRICS countries between 1990 and 2014. The results confirm both the environmental Kuznets curve and pollution haven hypotheses, highlighting the moderating effects of foreign direct investment and energy usage on carbon emissions. The study suggests promoting renewable sources and boosting clean foreign industries in host countries.