Achieving decarbonization goals in BRICS economies: Revisiting the joint role of composite risk index, green innovation, and environmental policy stringency

The Paris Agreement has united the global nations to embark on pathways to the decarbonization of their respective economies. However, the objective of achieving low-carbon growth is not as straightforward as it seems since the rapidly emerging and fossil fuel-dependent world economies are focused on expediting economic growth at the expense of poorer environmental consequences. Against this background, this study aims to explore the combined effects of composite risk index (CRI), green innovation (GINOV), and environmental policy stringency (EP) on carbon dioxide (CO₂) emissions in the context of the BRICS countries while controlling for economic growth (GDP) and renewable energy research and development (RERD) over the period from 1960 to 2020. The study uses the second-generation cross-sectionally augmented autoregressive distributed lags (CS-ARDL) framework for testing long- and short-run models and addressing the issues of cross-sectional dependency and slope heterogeneity in the data set utilized for analysis. The associated findings reveal cointegrating associations between the study variables. Besides, the regression outcomes show that EP, GINOV, and RERD help to reduce CO₂ emissions in the long run. However, CRI and GDP intensify CO₂ emissions. Accordingly, considering these key findings, it is recommended that environmental policies be tightened, green innovation and renewable energy R&D expenditures be promoted, political stability and institutional quality be maintained, and clean economic growth strategies adopted to enable the BRICS nations to reduce sectoral risks, create a sustainable environment, and decarbonize their respective economies.