Striving towards carbon neutrality target in BRICS economies: Assessing the implications of composite risk index, green innovation, and environmental policy stringency

The world governments have come together under the Paris Agreement to begin the decarbonization and transition to a zero-carbon economy. The goal of attaining low-carbon growth is not as simple as it may appear, however, because the fast developing and fossil fuel-dependent global economies are concentrated on accelerating economic expansion at the expense of catastrophic environmental repercussions. In light of these circumstances, this study aims to investigate the combined implications of composite risk (CRI), green innovation (GINOV), and environmental policy stringency (EPS) on carbon dioxide (CO2) emissions in the context of Brazil, Russia, India, China, and South Africa (BRICS), while controlling for economic growth (GDP) and renewable energy research and development (RERD) over the period from 1960 to 2020. The study addresses the problems of cross-sectional dependence and slope heterogeneity in the data set used for analysis by using the second-generation cross-sectionally augmented autoregressive distributed lags (CS-ARDL) framework to evaluate long- and short-run models. The accompanying findings confirm cointegrating relationships between the research variables. Additionally, the results of the regression demonstrate that EPS, GINOV, and RERD contribute to a long-term reduction in CO2 emissions. CRI and GDP, however, increase CO2 emissions. In light of these important conclusions, it is suggested that the BRICS nations prevent environmental deterioration by strengthening the stringency of environmental policies and promoting renewable energy research and development. In addition, the BRICS authorities should encourage the use of renewable energy sources and ecologically beneficial technologies to improve environmental quality and achieve carbon neutrality target.