Role of economic uncertainty, financial development, natural resources, technology, and renewable energy in the environmental Phillips curve framework

Abstract

Given the imperativeness of degenerated environmental quality, it is crucial to probe the impact factors of carbon dioxide emission (CE). Hence, this empirical outlet explores whether economic policy uncertainty (EPU), renewable energy (RENE), natural resources (NRR), financial development (FD), technological advancement (TIN), and employment level (EMP) impact CE in BRICST countries for the period 1990–2020. In addition to this, the study investigates whether EPU mollifies the RENE-CE nexus. To that end, we make use of the second-generation panel data tests and panel quantile regression (PQR) models. The outcomes from PQR approach manifest that RENE and EPU wane CE across all quantiles, whereas FD and EMP upsurge it. The findings also elucidate that NRR and TIN have a heterogeneous impact on CE across the quantiles. In addition to this, EPU inhibits the RENE-CE relationship at all quantiles. Thus, we provide a matrix of policy suggestions to achieve SDG-13 (Climate Action) in BRICST countries. For instance, policymakers should encourage RENE and TIN to curb emissions. Similarly, policymakers have to keep in mind the detrimental environmental effect of low EPU. Thus, special measures need to be taken during the low EPU regime.