Energy innovations, natural resource abundance, urbanization, and environmental sustainability in the post-covid era. Does environmental regulation matter?

Abstract

Natural resource extraction and environmental deterioration remains a big challenge to sustainable growth. Although, extensive research has been conducted on the factors that either improve or worsen the situation of environmental sustainability. However, one critical aspect that has received very little attention is energy innovation. This study aims to examine the role of energy innovation along with natural resource abundance and urbanization towards environmental sustainability in BRICS countries. Panel data of BRICS (Brazil, Russia, India, China, and India) countries from 1990 to 2020 was used and applied FGLS, SUR, and quantile regression models. The results from quantile regression show, EPT, EPS, and RENC negatively impacted CO2 emissions and improved environmental sustainability. All other variables (NENC, PD, GDP, and NRR) cause environmental degradation, as suggested by FGLS and SUR models. In all quantiles of quantile regression, the NRR bears the correct sign predicted by economic theory. All goodness-of-fit statistics confirmed the best fit of the FGLS, SUR, and quantile regression models. Therefore, the conclusions drawn are unbiased and consistent with the economic theory and can be used for policy formulation in the post-Covid era.