Do artificial intelligence investment, energy transition, and agriculture productivity affect carbon footprint? Evidence from panel data analysis of BRICS countries

Prasenjit Makur and Debasish Sur

Journal of Electronic Business & Digital Economics, 2025, vol. 4, issue 2, 334-350

Abstract: PurposeThe present study explores the role of artificial intelligence (AI) in reducing carbon footprints and promoting sustainable economic growth in the BRICS countries from 2013 to 2023.Design/methodology/approachThe study used slope heterogeneity and cross-sectional dependencies in panel data from the BRICS countries and the CIPS unit root test. The short- and long-term impacts of AI investment, energy transition, economic growth, and value added from industry and agriculture on the carbon footprint are examined using the PMG/ARDL technique. FMOLS and DOLS methods ensured the accuracy of the long-run outcomes. The PMG/ARDL framework’s error correction method captures the short-run dynamics, and the Dumitrescu-Hurlin test establishes a causal link.FindingsThe research highlights a significant reduction in carbon emissions driven by energy transition and agricultural productivity. While economic growth boosts BRICS economies, it also raises emissions in the short term. Interestingly, long-term AI investment and industrial value-added are linked to higher carbon footprints. The Dumitrescu-Hurlin panel causality test confirmed that agricultural productivity influences industry output and economic growth. Energy transition causally relates to the industry. Additionally, better AI investment in BRICS economies is a result of growing economic growth.Practical implicationsThe policy implications emphasise the promotion of renewable energy and sustainable technologies to mitigate AI-induced emissions in BRICS countries. Governments ought to endorse clean energy research and development, implement adaptable environmental legislation, and promote artificial intelligence in value-added industries to secure sustainable economic growth while mitigating environmental damage.Originality/valueThis study expands novel insights regarding the significance of artificial intelligence (AI) in reducing carbon footprints and promoting sustainable economic growth in the BRICS countries. Although previous research has mostly focused on how economic factors affect carbon footprints, this study is an infrequent attempt to determine how energy transition and AI investment (over 1.5 million US dollars) influence carbon footprints, thereby increasing environmental quality.

Keywords: Artificial intelligence; Economic growth; Carbon footprint; FMOLS; Agriculture value-added (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jebdep:jebde-02-2025-0017

DOI: 10.1108/JEBDE-02-2025-0017

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