The impact of geopolitical risk, governance, technological innovations, energy use, and foreign direct investment on CO2 emissions in the BRICS region

Geopolitical risk (GPR) and other social indicators have raised many somber environmental-related issues among government environmentalists, and policy analysts. To further elucidate whether or not these indicators influence the environmental quality, this study investigates the impact of GPR, corruption, and governance on environmental degradation proxies by carbon emissions (CO2) in BRICS (Brazil, Russia, India, China, and South Africa) countries, namely Brazil, Russia, India, China, and South Africa, using data over the period 1990 to 2018. The cross-sectional autoregressive distributed lag (CS-ARDL), fully modified ordinary least square (FMOLS), and dynamic ordinary least square (DOLS) methods are used for empirical analysis. First and second-generation panel unit root tests report a mixed order of integration. The empirical findings show that government effectiveness, regulatory quality, the rule of law, foreign direct investment (FDI), and innovation have a negative effect on CO2 emissions. In contrast, geopolitical risk, corruption, political stability, and energy consumption have a positive effect on CO2 emissions. Based on the empirical outcomes, the present research invites the concentration of central authorities and policymakers of these economies toward redesigning more sophisticated strategies regarding these potential variables to protect the environment.

Automated summary

This study investigates the impact of geopolitical risk, corruption, and governance on environmental degradation proxies by carbon emissions in BRICS countries using data from 1990 to 2018. The empirical findings show that government effectiveness, regulatory quality, the rule of law, FDI, and innovation have a negative effect on CO2 emissions, while geopolitical risk, corruption, political stability, and energy consumption have a positive effect on CO2 emissions. Based on these results, the study calls for the central authorities and policymakers of these economies to redesign more sophisticated strategies to protect the environment.