The role of environmental tax policy, natural resource rents, and outward foreign direct investment in advancing clean energy consumption in BRICS-T countries

Within the framework of energy transition theory, this study examines the drivers of renewable energy consumption (REC) in the BRICS-T countries (Brazil, Russia, India, China, South Africa, and Turkey) from 1990 to 2022. Using the pooled mean group (PMG)-Autoregressive Distributed Lag (ARDL) and the Panel Nonlinear ARDL (NARDL) models, this study specifically examines the effects of technological innovation, outward FDI, environmental tax policy, natural resource rents, and urbanization on renewable energy consumption. The PMG-ARDL results indicate that environmental tax policies and natural resource rents have a significant long-term impact on reducing renewable energy consumption, while technological innovation strongly promotes renewable energy consumption. The short-run estimates confirm the adjustment process toward equilibrium and reveal the immediate benefits of technological innovation. The NARDL model reveals asymmetric dynamics, such that tax cuts are more detrimental to renewable energy consumption than tax hikes are beneficial to it. Also, the declines in innovation have proportionately larger adverse effects than gains from innovation. The robustness checks using fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) reinforce these findings. The causality analysis further shows that renewable energy consumption drives adjustments in environmental taxes and resource rents, while outward FDI unidirectionally supports renewable energy consumption. These results emphasize that consistent policy frameworks, sustained technological investment, prudent management of natural resource rents, and urban planning reforms are critical for accelerating the clean energy transition in BRICS-T economies.