Trends of Carbon Emissions and Foreign Direct Investment: Accounting for Ecological Footprints, Renewable Energy, Globalization and Technological Innovations in BRICS

Abstract

This paper explores the relationship between carbon emission (CE) and foreign direct investment (FDI) keeping the ecological footprint, renewable energy, globalization, and technological innovations as exogenous variables. We employ the system of equations in the form of simultaneous equations for the panel of BRICS countries to fully capture the proposed association. This study highlights the importance of ecological footprints for the determination of CE and FDI along with some exogenous and instrument variables. Our empirical findings of explaining CE assert that FDI, technological innovations, and renewable energy significantly help to curtail carbon emissions in selected countries. However, the ecological footprints are causing CE positively which yields an alarming situation in two ways, firstly a high of rate environmental degradation, and secondly the pressure of humans on land is increasing and that is causing to increase in the EF in BRICS. The equation of FDI is presenting the curtailing impact of CE and RER whereas globalization is increasing the investment rate in BRICS. Mineral mining should be controlled and regulated since it has the potential to have a number of negative effects, including soil pollution, acid mine drainage, erosion, biodiversity loss, considerable water resource usage, and problems with wastewater disposal. Nonetheless, recycling mining waste, employing environmentally friendly equipment, stopping illegal mining, and enhancing mining sustainability may all help to lessen the effects of mining on the environment.