Does economic fitness matter in carbon emissions mitigation in BRICS countries?

Abstract

The economic fitness of a country shows its capacity to address complex issues, such as climate change and environmental degradation, which are urgent global concerns. Its key function is given less importance in empirical research and has been neglected by existing empirical studies. Concerning this neglect, our study investigates the influence of economic fitness on CO₂ emissions in the context of the environmental Kuznets curve (EKC) for the BRICS nations between 1995 and 2015. The Feasible Generalized Least Squares (FGLS) and Panel-Corrected Standard Error (PCSE) techniques are used to estimate the empirical association. The results suggest that economic fitness and CO₂ emissions have an inverted N-shaped relationship. Furthermore, after accounting for major contributing factor of CO₂ emissions like GDP per capita, financial development, urbanization, and foreign direct investment, our robustness checks produce robust and significant results.

Keywords: BRICS; Economic fitness; Environmental degradation.