Abstract
The study explores the dynamic effects of renewable energy investment (green financing), green technology, and trade openness on consumption-based (trade-adjusted) carbon emissions in BRICS economies from 2000 to 2020. The study employs the cross-section autoregressive distributed lag method for empirical estimation to address slope heterogeneity and cross-sectional dependency issues in panel data. The findings exhibit that green financing and sustainable technologies mitigate consumption-based carbon emissions in the long-run, while trade openness contributes to emissions in BRICS countries. The short-run outcomes are compatible with long-run; however, the magnitude of long-run estimates is larger than the short-run. Moreover, the error correction term reveals a significant negative coefficient value, endorsing the conversion towards steady-state equilibrium with a 37% yearly adjustment rate in case of any deviation from equilibrium. The robustness of results is confirmed through augmented mean group and common correlated effect mean group. These findings imply that BRICS countries should encourage financing in renewable energy projects and allocate R&D investment to promote the adaptation of sustainable technologies. In addition, sustainable and green trade policies would help to curb trade-adjusted pollution.
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