Energy consumption and innovation-environmental degradation nexus in BRICS countries: new evidence from NARDL approach using carbon dioxide and nitrous oxide emissions

The BRICS nations-Brazil, Russia, India, China, and South Africa-have grown significantly in importance over the past few decades, playing a vital role in the development and growth of the global economy. This expansion has not been without cost, either, since these countries' concern over environmental deterioration has risen sharply. Both researchers and decision-makers have focused a lot of attention on the connection between economic growth and ecological sustainability. By using nonlinear autoregressive distributed lag (NARDL) approach, the complex relationships were analyzed between important economic indicators-such as gross domestic product (GDP), ecological innovations (EI), energy consumption (ENC), institutional performance (IP), and trade openness (TOP)-and their effect on carbon emissions and nitrous oxide emissions in the BRICS countries from 1990 to 2021, this study seeks to contribute to this important dialog. Principal component analysis is formed for technological innovations and institutional performance using six (ICT service exports as a percentage of service exports, computer communications as a percentage of commercial service exports, fixed telephone subscriptions per 100 people, internet users as a percentage of the population, number of patent applications, and R&D expenditures as a percentage of GDP) and twelve (government stability, investment profile, socioeconomic conditions, internal conflict, external conflict, military in politics, control of corruption, religious tensions, ethnic tensions, law and order, bureaucracy quality, and democratic accountability) distinct indicators, respectively. The results of nonlinear autoregressive distributed lag estimation show that increase in economic growth would increase carbon dioxide and nitrous oxide emissions. The positive and negative shocks in trade openness have positive and significant impact on carbon dioxide and nitrous oxide emissions in BRICS countries. Furthermore, the positive shock energy consumptions have positive and significant effect on Brazil and India when carbon dioxide and nitrous oxide emissions are used. However, EKC exists in BRICS countries when carbon dioxide and nitrous oxide emissions are used. According to long-term estimation, energy consumption and technological innovations in the BRICS countries show a strong and adverse link with nitrous oxide and a favorable relationship with carbon dioxide emissions. In the long run, environmental indicators are seen to have a major and unfavorable impact in BRICS nations. Finally, it is proposed that BRICS nations can assure environmental sustainability if they support creative activities, enhance their institutions, and support free trade policies.