Impact of economic policy uncertainty, oil prices, and technological innovations on natural resources footprint in BRICS economies

Abstract

Domestic materials help people and the environment coexist. Since the Industrial Revolution, resource use has increased, so it's important to monitor how much resources are used to make intermediate or finished goods. The literature identifies several causes of resource depletion and environmental degradation. The study examines the asymmetric effects of technological advancements, economic policy uncertainty (EPU), and oil prices on material footprint (MFP). This study examined the relationship between oil prices, economic policy uncertainty, and technological innovation using consumption-based material footprints as a comprehensive indicator of human pressure on resources. Panel ARDL and Non-linear ARDL estimators were used to examine symmetric and asymmetric relationships for the BRICS economies from 1991 to 2022. The asymmetric model shows that economic policy uncertainty increases BRICS resource consumption. Positive or negative EPU shocks increase MFP, while oil price shocks lower MFP due to economic activity slowing due to rising oil prices. This is shown by the COVID-19 lockdown, which reduced oil consumption and improved the climate but halted all business. Technology innovations also have long-term and short-term effects. This shows that the BRICS region urgently needs innovative long-term technology, sustainable economic policies, and energy regulations for resource management.