Do innovation in environmental-related technologies cyclically and asymmetrically affect environmental sustainability in BRICS nations?

Abstract

This study contributes to the current research by identifying the cyclical and asymmetrical impact of innovation in environmental-related technologies on carbon dioxide emissions in BRICS economies, as well as control variables such as fossil fuels, export taxes, household consumption expenditures, and exports, for the period 1990(Q1)-2016 (Q4). Following are some of the key findings. First, the data analysis indicated a significant long-term positive link between negative shocks to innovation in environmental-related technologies and carbon dioxide emissions during the economic downturn. Second, positive shocks to innovation in environmental-related technologies minimize carbon dioxide emissions during the economic upturn. Third, the relationship between innovation shocks in environmental-related technologies and carbon dioxide emissions was counter-cyclical during business cycles. Fourth, impact of positive shocks to innovation in environmental-related technologies on carbon dioxide emissions was more than the impact of negative shocks to innovation in environmental-related technologies on carbon dioxide emissions. Fifth, increasing the export tax serve as an effective measure to mitigate carbon dioxide emissions. Sixth, an increase in exports, use of fossil fuels, and household consumption expenditures contributed to the carbon dioxide emissions. Based on estimated results, the paper suggests policy implications for policymakers to reduce carbon dioxide emissions.