Does institutional quality matter for renewable energy consumption and CO2 emissions? Evidence from a panel of BRICS countries

Abstract The main purpose of the present study is to explore the impact of institutional quality (IQ) on renewable energy consumption (REC) and CO₂ emissions (CO₂e) in a panel of BRICS countries, spanning the period 1996Q4-2016Q4. To accomplish this, we use several panel econometric techniques on targeted models. The results of the Westerlund panel cointegration test show that there is a significant long-run equilibrium association among the variables. Furthermore, Augmented Mean Group (AMG) estimator outcomes reveal that IQ has a significant positive impact on REC. Non-renewable energy consumption (NREC) has a positive association with CO₂e, while IQ and REC significantly reduce CO₂e. Finally, we found no causal nexus between IQ, REC, and CO₂e in BRICS countries. Our novel study findings not only provide new empirical evidence to the existing literature but also help policymakers strengthen the IQ to promote the uses of renewable energy and mitigate CO₂e.