A new answer to the old question of the environmental Kuznets Curve (EKC). Does it work for BRICS countries?

Given the escalating trends of rapid industrialization, energy consumption, and environmental concerns, it is crucial to comprehend the interplay between industrial growth and environmental sustainability. This study mainly focuses on verifying the Environmental Kuznets Curve (EKC) hypothesis by investigating the nexus between industrial growth and CO2 emissions in the BRICS countries (Brazil, Russia, India, China, and South Africa) from 1990 to 2020. Additionally, this study investigates the impact of financial development, trade openness, renewable energy consumption, and fossil fuel consumption on CO2 emissions. Robust econometric methods are employed to address the cross-sectional dependency, endogeneity, and weak instrument issues. The findings reveal that fossil fuel consumption leads to environmental deterioration, while renewable energy consumption, financial development, and trade openness enhance environmental quality. Furthermore, the results also support the validity of the EKC hypothesis for all BRICS countries. The causality results indicate a feedback relationship among industrial growth, trade openness, and CO2 emissions. These findings hold important implications for policymakers in crafting effective energy policies aligned with the Paris Agreement's objectives, harmonizing the balance between economic growth and environmental sustainability in the BRICS countries.