Reassessing the Growth–Environment Nexus in BRICS: Moderating Role of Trade Openness and Human Development

Abstract

This study examines the growth–environment nexus in BRICS economies (Brazil, Russia, India, China, and South Africa) by testing the Environmental Kuznets Curve (EKC) hypothesis, with a focus on the moderating roles of trade openness (TO) and human development (HD). Drawing on the STIRPAT framework, it investigates whether economic growth initially exacerbates CO₂ emissions before mitigating them, and how interactions with TO and HD influence this trajectory. Using annual panel data from 1991 to 2023 sourced from EDGAR, World Bank, and UNDP, the analysis employs second-generation unit root tests (CIPS, Bai and Ng-PANIC), cointegration tests (Fisher-Johansen, Kao), and long-run estimators (FMOLS, PMG-ARDL). Results confirm the EKC's inverted U-shape, with GDP positively impacting emissions initially but negatively at higher levels. HD and TO independently increase emissions, yet their interactions with GDP and GDP² significantly reduce environmental degradation, highlighting technology diffusion and awareness gains. Dumitrescu-Hurlin causality reveals bidirectional links between GDP, HD, and CO₂, but unidirectional from TO to CO₂. These findings underscore the potential for BRICS to achieve sustainable growth through green trade policies, renewable energy, and human capital investments, though country-specific nuances warrant tailored strategies.