Natural resources, energy efficiency transition and sustainable development: Evidence from BRICS economies

Abstract

Due to the prevalence of natural resource dependence and its adverse impact on sustainability in various emerging economies, this study analyzes this nexus more comprehensively. The research examines the specific influence of forest rents, mineral rents, natural gas rents, oil rents, coal rents, and total natural resource rents on the sustainable development of the BRICS economies. Due to the importance of energy efficiency in recent environmental protection and economic growth trends, this research tested its role in sustainable development from 1990 to 2020. For empirical examination, various panel data estimators are employed, which leads to the utilize the second-generation unit root test and validate the variables' stationarity. Due to asymmetrical data distribution, this study utilizes the method of moments quantile regression – a more robust and efficient estimator. The results asserted that forest rents, coal rents, and energy efficiency adversely affect the region's sustainable development. At the same time, oil rents are a significant factor in sustainability. The mineral rents are found insignificant in association with the development. In addition, the total natural resources are negatively associated with growth, which validates the resource curse hypothesis in the region. Besides, the results suggested that the negative influence of energy efficiency is transformed into a positive one in the presence of total natural resource rents, reflecting the importance of natural resources for the region's sustainability. The causality results verify the robustness of the model. Based on the empirical findings, this study recommends policies for attaining sustainable regional development.