The effect of technological innovation on production-based energy and CO2 emission productivity: Evidence from BRICS countries

Abstract

Collectively, Brazil, the Russian Federation, India, China and South Africa (known as BRICS) are emerging as an economic superpower. In 2014, BRICS countries accounted for approximately 40% of the total world population, 30% of the total earth surface and almost 20% of the world’s economic output. Along with increasing economic growth in BRICS countries, energy usage and related carbon emissions are drawing increasing attention as a result of increasing international concern about climate change. Environmental policy has two types of role to play in the economic process. On one hand, firms can adopt or purchase existing ‘cleaner’ technology; on the other hand, they can invest in R&D for inventing new ‘cleaner’ technology. A panel data econometrics analysis of the relevant variables taken from the OECD data set for the period 2005–2012 reveals that innovative environment-related technology has had a sound impact on the sustainable performance of BRICS countries, with the green technological innovations having helped firms and countries, as a whole, to reduce their energy absorption and CO2 emissions. These technologies have positively helped to improve production-based energy productivity and production-based CO2 emission productivity.