Abstract
Amidst global environmental reforms, the role of energy systems is under scrutiny to promote ecological welfare through low-carbon alternatives. Amongst the solutions, the role of renewable energy as a clean source has become popular to mitigate climate change. However, the impact of debt on renewable energy consumption remains limited in the economic literature. The debt initiatives provide funding for environmental initiatives primarily, while it is also credited as a barrier to limiting the growth of clean energy programs. Within such discussion, the current study extended the dialogue by examining how external debt impacts energy transition in Brazil, Russia, India, China, and South Africa (BRICS) economies in the presence of institutional quality, education expenditures, and banking development. Using the novel CS-ARDL, AMG, and CCEMG tests, the study results showed that external debt decreases renewable energy consumption, while institutional quality, educational expenditures, banking developments, and economic growth are essential elements of green energy developments. Based on these conclusions, this study provides novel policy guidelines to align BRICS energy and economic agendas.
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