Impact of Renewable Energy, Business Climate, and Human Capital on CO 2 Emissions: Empirical Evidence from BRICS Countries

Funda H. Sezgin (), Yilmaz Bayar, Gamze Sart and Marina Danilina
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Funda H. Sezgin: Department of Industrial Engineering, Istanbul University-Cerrahpaşa, 34500 İstanbul, Turkey
Yilmaz Bayar: Department of Public Finance, Bandirma Onyedi Eylul University, 10200 Balikesir, Turkey
Gamze Sart: Department of Educational Sciences, Hasan Ali Yucel Faculty of Education, İstanbul University-Cerrahpaşa, 34500 İstanbul, Turkey
Marina Danilina: Department of Economics, Plekhanov Russian University of Economics (PRUE), 117997 Moscow, Russia

Energies, 2024, vol. 17, issue 15, 1-17

Abstract: Since the 1950s, the remarkable amount of global environmental degradation has heightened environmental concerns at both national and international levels. This shift has spurred intensive research into the causes of environmental degradation and potential remedies, including environmental taxes, fines, education, and regulations. The drivers of CO 2 emissions have been widely explored in the literature, but the nexus between business climate, human capital, and CO 2 emissions has not been examined sufficiently. Therefore, the purpose of this study is to delve into the interplay between renewable energy, business climate, human capital, and CO 2 emissions in BRICS countries from 2000 to 2020 using panel causality and cointegration tests. Our research hypotheses suggest that there are significant mutual interactions among renewable energy, business climate, human capital, and CO 2 emissions based on the associated literature. The results of the causality test verify the research hypotheses by uncovering a bidirectional causality between business climate, renewable energy use, human capital, and CO 2 emissions. Furthermore, the cointegration analysis reveals that increases in renewable energy use and human capital decrease CO 2 emissions at the panel level, but a positive business climate increases CO 2 emissions at the panel level. However, the impact of business climate on CO 2 emissions at the country level varies among BRICS economies based on environmental policies. In conclusion, investing in green energy technologies and education is a useful tool to decrease CO 2 emissions. In addition to this, the positive effect of business climate on CO 2 emissions should be balanced by regulations to increase environmental, social, and governance awareness of firms.

Keywords: environmental sustainability; renewable energy; business climate; human capita; panel-level analysis (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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