Recent scenario and nexus between natural resource dependence, energy use and pollution cycles in BRICS region: Does the mediating role of human capital exist?

Atif Jahanger, Mohammad Razib Hossain, Muhammad Usman and Joshua Chukwuma Onwe

Resources Policy, 2023, vol. 81, issue C

Abstract: One of the most distressing global problems in this era is climate change caused by greenhouse gas (GHG) emissions. This global issue affects both developed and emerging economies. The alarming news is that much of this problem is materializing due to manufactured actions, strongly linked to an economy's productive sector that has been expanding incessantly in recent years. This event has led to an increase in energy consumption, especially in BRICS (Brazil, Russia, India, China, and South Africa) territories, which are rich in natural resources and production capabilities. Energy consumption-led pollution is burgeoning even after these nations' eye-catching progress in human capital. Thus, the present study aims to determine whether natural resource rent (NRR), energy use, and human capital (HC) matter in restoring environmental quality in BRICS economies from 1990 to 2018. The study's findings based on the panel quantile regression delineate that economic growth and non-renewable energy usage surge GHG emissions across all quantiles. Contrarily, renewable energy reduces emissions and restores environmental sustainability. The authors note heterogeneous effects of natural resource rent on GHG emissions (i.e., a significant positive relationship in the lower quantiles (10th to 40th) and a negative relationship in the upper quantiles (70th to 90th). Furthermore, human capital appears to help lower GHG emissions. Notably, human capital significantly supports mediating the negative environmental externalities from natural resource rent (i.e., the interaction term of LNRR*LHC is negative across all quantiles) in the BRICS economies. Thus, BRICS territories can benefit more by investing in human capital development and adopting mining principles that are scientific and help restore biocapacity surplus with less environmental costs. Phase-by-phase decoupling is also recommended for these nations through more dependence on renewables. Further policies have been discussed in the ultimate section.

Keywords: Natural resources; Renewable energy; Non-renewable energy; Human capital; Panel quantile regression; BRICS countries (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:81:y:2023:i:c:s0301420723000909

DOI: 10.1016/j.resourpol.2023.103382

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