Does geopolitical risk escalate CO₂ emissions? Evidence from the BRICS countries

Area of Science:

• Environmental Science
• Economics
• Political Science

Background:

• High carbon dioxide (CO₂) emissions are a major global concern.
• Existing research often overlooks the influence of geopolitical risks (GPR) on CO₂ emissions.
• Understanding factors driving CO₂ is crucial for effective climate change mitigation.

Purpose of the Study:

• To investigate the impact of geopolitical risks (GPR) on CO₂ emissions in BRICS countries.
• To analyze the role of population, GDP, and energy consumption (renewable and non-renewable) as control variables.
• To contribute novel insights into the drivers of CO₂ emissions in emerging economies.

Main Methods:

• Utilized the geopolitical risk (GPR) index developed by Caldara and Iacoviello (2018).
• Employed the augmented mean group (AMG) estimator for robust econometric analysis.
• Controlled for population, GDP, non-renewable energy, and renewable energy consumption.

Main Results:

• A 1% increase in geopolitical risks (GPR) leads to a 13% rise in CO₂ emissions.
• Increased consumption of renewable energy was found to impede CO₂ emissions.
• Higher GDP, population, and non-renewable energy consumption were associated with increased CO₂ emissions.

Conclusions:

• Geopolitical risks (GPR) are a significant, yet understudied, driver of carbon dioxide (CO₂) emissions.
• Promoting renewable energy consumption is vital for reducing CO₂ emissions.
• Policy interventions aimed at reducing GPR and increasing renewable energy adoption are recommended for BRICS nations.