Does Economic Complexity and Sustainable Energy Transition Impact Carbon Efficiency? Fresh Evidence From BRICS

Arup Roy

Review of Development Economics, 2026, vol. 30, issue 1, 503-517

Abstract: Transitioning to low‐carbon economic growth is indispensable for achieving sustainable development goals (SDGs) for BRICS countries (Brazil, Russia, India, China, and South Africa), responsible for 45.8% of global CO2 emissions. Economic complexity (ECI), which assesses the level of sophistication in productivity and economic structure, and renewable energy consumption (RC) impact carbon efficiency, which could be used to achieve the mutually beneficial objectives of economic growth and carbon reduction. Accordingly, this study examines the effect of ECI, energy intensity, and RC on carbon efficiency while controlling for economic development in the context of BRICS using panel data from 1995 to 2020. Methodologically, this study employed the 2nd generation unit root tests, the Westerlund cointegration, and long‐run estimators of CS‐ARDL, CS‐ECM, and AMG. The empirical findings demonstrate that economic complexity and renewable energy positively impact carbon efficiency in the long run. Conversely, there is a decline in carbon efficiency when there is an increase in energy intensity. Additionally, economic growth is shown to enhance carbon efficiency. Moreover, our empirical findings pass robustness assessments in agreement with our primary results. Finally, strategies are implemented in accordance with SDGs 7 and 13 to regulate CO2 emissions by optimizing their economic structural transformation and transitioning energy sourcing technology.

Date: 2026
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