The influence of economic complexity processes and renewable energy on CO2 emissions of BRICS: What about Industry 4.0?

The influence of economic complexity processes and renewable energy on CO2 emissions of BRICS: What about Industry 4.0?
Authors: Daniel Balsalobre-Lorente, Clara Contente dos Santos Parente, Nuno Carlos Leitão, José María Cantos-Cantos
Journal: Resources Policy
Volume: Volume 82
Published: May 2023

This study investigates the relationship between per capita carbon dioxide emissions, economic complexity, renewable energy, and foreign direct investment (FDI) in BRICS countries—Brazil, Russia, India, China, and South Africa—covering the period 1995 to 2020. The analysis confirms the Environmental Kuznets Curve (EKC), showing that economic development initially increases CO2 emissions but eventually contributes to their reduction. The study also validates the Pollution Haven Hypothesis, indicating that BRICS economies often maintain less stringent environmental regulations to attract FDI, which in turn raises emissions.

Renewable energy emerges as a significant factor in reducing carbon emissions, while the role of Industry 4.0 technologies appears moderate but promising in the long term, potentially supporting emission neutrality. The research suggests that improvements in the economic complexity index over time can help reduce environmental pollution, complementing the positive effects of cleaner energy adoption.

Policy implications highlight the importance of promoting renewable energy and green technologies to mitigate environmental impacts. Authorities are encouraged to integrate sustainable practices alongside FDI policies, ensuring that economic growth does not compromise environmental objectives. Future research should expand on variables such as trade, human development, democracy quality, and financial development, while also assessing the environmental impact of emerging Industry 4.0 technologies with better data availability to support emission neutrality goals in BRICS nations.