Exploring the nexuses of disintegrated energy consumption, structural change, and financial development on environmental sustainability in BRICS: Modulating roles of green innovations and regulatory quality

Abstract

The global economy today is working towards neutralizing greenhouse gas emissions which has been viciously polluted the ecosystem beyond many expectations. Therefore, this study probes how regulatory quality and green innovations intermediate among disintegrated energy resources (renewable, nuclear, and nonrenewable energy), structural change, and financial development to promote environmental sustainability in BRICS. The study relies on recent econometric procedures such as second generation unit root and cointegration tests, homogeneity tests, and cross-sectional autoregressive distributed lag (CS-ARDL) estimation technique using data from 1996 to 2019. The results show how the interventions of regulatory quality and green innovations enhance the effects of other regressors to substantially moderate the surge in GHG emissions. Among others, renewable energy, nuclear energy, and structural change provide adequate support for achieving environmental sustainability in the presence of the two mediating variables. In contrast, nonrenewable energy and financial development serve as setbacks in the pursuance of sustainable environment. In addition, robustness checks based on common correlated effects mean group, augmented mean group and quantile regression estimators provide support to show persistence in the CS-ARDL results. Practicable policies enhance the pathway to carbon free environment are suggested for the BRICS economies.