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

Author

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

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.

Suggested Citation

  • Albanese, Marina & Busato, Francesco & Ulloa Severino, Claudia & Varlese, Monica, 2025. "Exploring the Link Between Economic Growth and GHG Emissions: Insights from BRICS+ and Beyond," MPRA Paper 123550, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123550
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    More about this item

    Keywords

    Renewable energy; Economic growth; GHG emission; Panel data regression.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment

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