Does governance play any role in energy transition? Novel evidence from BRICS economies

Indubitably, energy transition, which is responsible for enhancing renewables in the energy mix, is considered one of the finest strategies for reducing non-renewable utilization and thus helping economies achieve sustainable development goals (SDGs). In this regard, technological innovation and good governance are not only helpful in stimulating green energy supply but also enhance the efficiency of resources to reach the goals. Along with it, diligent long-term policies are required to inculcate some progression in the achievement of SDGs for climate safety. Thereby, factors such as good governance, technological innovation, trade openness, and economic growth can be addressed in a single framework. To achieve the objective of the study, we employ second-generation panel estimation techniques that are robust to cross-sectional dependence and slope heterogeneity. Specifically, we apply the cross-sectional autoregressive distributed lag (CS-ARDL) model for short- and long-run parameter estimation. The main findings are that governance and technological innovation both positively and significantly influence energy transition in the long run and short run. Economic growth affects energy transition positively, but trade openness affects energy transition negatively, while CO₂ emissions have no significant impact on energy transition. Robustness checks, the common correlated effect mean group (CCEMG), and the augmented mean group (AMG) all validated these findings. Based on the findings, government officials are recommended to strengthen institutions, control corruption, and improve the quality of regulations in order to enhance the contributions of institutions to the transition to renewable energy.