Green recovery, Low-Carbon Economy and Sustainable Development in BRICS Economies

Recovery packages are increasingly presented as a route to “build back better”, yet the extent to which green-labelled spending translates into measurable sustainability gains remains uncertain. This study examines how green recovery initiatives and low-carbon economic strategies shape sustainable development outcomes in BRICS, asking what effect green recovery has on sustainable development, how the transition to a low-carbon economy contributes to sustainability performance, and whether low-carbon development mediates the green recovery–sustainable development relationship. Using a quantitative panel design and harmonised secondary data for Brazil, China, India and South Africa over 2000–2023, sustainable development is proxied by adjusted net savings (% of GNI), green recovery by renewable energy investment, and the low-carbon economy by renewable energy consumption (% of total final energy). Panel-corrected standard errors are applied to full-sample and regime-specific estimates (pre-COVID: 2000–2019; COVID: 2020–2023), complemented by country-specific PCSE models, while mediation is assessed using fixed effects with 1,000 bootstrap replications. The results indicate that green recovery exhibits weak and regime-dependent links with sustainable development: it is modestly positive pre-COVID but becomes significantly negative during COVID and remains statistically insignificant in the full sample. In contrast, the low-carbon transition is positively and robustly associated with sustainable development, with a substantially stronger effect during COVID. The estimated indirect effect of green recovery via the low-carbon channel is positive but statistically insignificant, suggesting that green recovery has not yet produced consistent energy-mix shifts capable of transmitting sustainability gains. The study contributes by jointly estimating direct, low-carbon, and mediation pathways under crisis and non-crisis regimes, offering evidence to strengthen SDG 7, SDG 11 and SDG 13 alignment in major emerging economies.