Effects of foreign aid and energy aid inflows on renewable and non-renewable electricity production in BRICS countries

We empirically examine the effects of overseas aggregate aid and energy aid inflows on renewable and non-renewable electricity production in selected BRICS countries (i.e., Brazil, India, China, and South Africa) from 1995 to 2015. Economic growth, foreign direct investment inflows, and trade openness are control variables in electricity production functions. The results from employing fully modified ordinary least square and dynamic OLS techniques indicate that economic growth, inflows of aggregate aid, energy aid, and foreign direct investment promote renewable electricity production, while trade openness reduces it. We also find that aggregate aid and energy aid inflows reduce the non-renewable electricity production, while economic growth, foreign direct investment inflows, and trade openness promote it. Moreover, our study is unique and adopts different panel estimators, ensuring the robustness of the research findings. Our findings suggest that the BRICS economies' march towards a sustainable environment becomes possible if policymakers, in their climate mitigation policy, encourage greater investments of overseas aggregate aid and energy aid inflows toward renewable electricity production.

Automated summary

This study empirically examines the effects of overseas aggregate aid and energy aid inflows on renewable and non-renewable electricity production in selected BRICS countries. The findings indicate that economic growth, aid inflows, foreign direct investment, and trade openness promote renewable electricity production, while trade openness reduces it. Additionally, aid inflows reduce non-renewable electricity production, while economic growth, foreign direct investment, and trade openness promote it.