Political Economy Perspective of Government Effectiveness for Clean Energy Transition: Empirical Evidence from BRICS Economies

Liping Yang, Rija Zaka, Shakeel Sajjad, Dhanuskodi Rengasamy, Naveed Khan and Asad Jalal

Politická ekonomie, vol. preprint

Abstract: Energy efficiency is the cost-effective utilization of energy in the production process, whereby energy waste is minimized and the overall depletion of primary energy resources is curtailed. Improving energy efficiency enables countries to abate the rising CO2 emissions by efficient utilization of energy. Hence, energy efficiency is a source of improving environmental performance. This study examines the deep determinants of energy efficiency in BRICS countries. The main objective of the study is to examine the impact of effective governance on energy efficiency in BRICS countries. This study utilizes both fixed-effect and random-effect approaches to examine the determinants of energy efficiency. To check the cross-sectional dependence, this study utilizes residual cross-sectional dependence tests. The results of the fixed-effect approach show that government effectiveness and oil rents improve energy efficiency in BRICS countries. However, mineral rents negatively affect energy efficiency. The study finds that an increase in R&D negatively affects energy efficiency; however, after achieving a certain level of R&D expenditures, a further increase in R&D is linked to improved energy efficiency. This nonlinear relationship suggests that while initial investments in R&D may not immediately translate into energy efficiency gains, continued investment beyond a certain threshold can lead to significant improvements in energy efficiency through technological innovation and advancements. The findings highlight the pivotal role of government effectiveness in driving energy efficiency improvements. Countries with more effective governance structures demonstrate higher levels of energy efficiency, emphasizing the importance of transparent, accountable and coherent policy frameworks in promoting sustainable development agendas. These findings have significant policy implications for policymakers and stakeholders in BRICS countries aiming to foster sustainable energy transitions and enhance energy efficiency.

Keywords: Resource rents; government effectiveness; energy efficiency (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1492

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