Does environmental policy stringency improve nature's health in BRICS economies? Implications for sustainable development.

ABSTRACT

In our groundbreaking exploration, we meticulously delve into the relationship between environmental policy stringency, international trade dynamics, and financial openness within the BRICS group (Brazil, Russia, India, China, and South Africa) spanning from 1996 to 2021. With a focus on critical variables such as economic growth and technological innovation, our empirical findings challenge conventional wisdom. Surprisingly, we found that those stringent environmental policies, when standing alone, do not invariably lead to reduce CO2 emissions. Equally interesting is our startling discovery that the anticipated moderating influence of environmental policy stringency, catalyzed by trade and foreign direct investment, on the well-being of our environment does not materialize; contrarily, both trade and foreign direct investment moderating channels exhibit unanticipated positive correlations with CO2 emissions. These revelations provoke us with the presence of a "pollution haven" phenomenon within the BRICS economies. Furthermore, our investigation reveals that, when examined individually, trade and foreign direct investment also appear to contribute to elevated emission levels. These findings provide a resolute solution to our research quandary, underlining the indispensable requirement for cutting-edge and robust environmental policies. These policies must possess the prowess to effectively counteract the adverse environmental consequences stemming from the amalgamation of global trade and financial integration. In doing so, they shall propel BRICS nations toward a future firmly grounded in principles of sustainability and ecological integrity.