Examining the nexus between export diversification and environmental pollution: evidence from BRICS nations

Abstract

In recent years, industrial growth has enabled the BRICS nations to increase their export earnings from both traditional and new products. However, in terms of modernization of industries, these nations can be considered as laggards, because the present production processes appear to be carbon-intensive and energy-inefficient. In this backdrop, the present study, by using the second-generation econometric procedures, is intended to examine the impact of industrialization, export diversification, technological innovation, income inequality, and resource rents on the carbon dioxide emissions in the BRICS nations from 1990 to 2018. The long-run coefficients revealed that the industrial expansion, reduction in export diversification, low concentration on traditional exports, and high concentration on new exports exacerbated the air quality in the BRICS nations. On the other hand, technological advancement contributed to restoring environmental quality during the study period. Furthermore, it is observed that the present research endeavors in the BRICS nations are insufficient in circumventing industrial pollution, as the value of the joint coefficient of technological advancement and industrialization is found insignificant but negative. Hence, based on the computed results, a multipronged policy framework is proposed, so that these nations can achieve the targeted sustainable development goals (SDGs) in the coming years.