Exploring the Link Between Economic Growth and GHG Emissions: Insights from BRICS+ and Beyond

Marina Albanese, Francesco Busato, Claudia Ulloa Severino and Monica Varlese

MPRA Paper from University Library of Munich, Germany

Abstract: The transition from fossil fuels to sustainable solutions remains a significant challenge, primarily due to path dependence which affects many economies. This calls for a new approach to economic growth that fully accounts for environmental costs. Consequently, understanding the factors that influence GDP growth is essential for achieving sustainable economic development. This study contributes to the existing literature by examining how greenhouse gas emissions, renewable energy, and urbanization impact GDP growth across various economic contexts. Employing a balanced panel comprising the US, EU27 and the BRICS economies from 1990 to 2022, it is among the first ones to incorporate the expanded BRICS+ economies into the analysis. Key empirical results are the following: First, Greenhouse gas emissions have a unidirectional effect on GDP growth across all panels, driven by emissions-intensive sectors like manufacturing; Second, in BRICS+ countries, urbanization and GDP are strongly interconnected, with emissions-driven growth posing future sustainability challenges; Third, the Environmental Kuznets Curve hypothesis is supported, indicating that while economic growth initially leads to greater pollution, higher incomes eventually promote investment in renewable sources. Hence, policies promoting the energy transition underscore the importance of integrating the economic growth and environmental sustainability in pursuing multidimensional well-being.

Keywords: Renewable energy; Economic growth; GHG emission; Panel data regression. (search for similar items in EconPapers)
JEL-codes: C23 E60 E66 F64 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ene, nep-env and nep-gro
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