Can financial globalization and good governance help turning emerging economies carbon neutral? Evidence from members of the BRICS-T

• Published in: Environmental science and pollution research international 2023-03, Vol.30 (14), p.39826-39841
• Main Authors: Hashmi, Nazia Iqbal, Alam, Naushad, Jahanger, Atif, Yasin, Iftikhar, Murshed, Muntasir, Khudoykulov, Khurshid
• Format: Article
• Language: English
• Subjects: Aquatic Pollution; Atmospheric Protection/Air Quality Control/Air Pollution; Carbon dioxide; Carbon Dioxide - analysis; Carbon neutrality; Carbon offsets; Earth and Environmental Science; Economic Development; Economic growth; Ecotoxicology; Emissions; Energy policy; Energy transition; Environment; Environmental Chemistry; Environmental Health; Environmental Kuznets curve; Environmental Pollution; Environmental science; Globalization; Green economy; Hypotheses; Indicators; Internationality; Investments; Pollution; Renewable Energy; Renewable resources; Research Article; Urbanization; Waste Water Technology; Water Management; Water Pollution Control
• ISSN: 1614-7499; 0944-1344; 1614-7499
• DOI: 10.1007/s11356-022-25060-8

Since turning carbon neutral is regarded as a major macroeconomic agenda worldwide, this study examines whether financial globalization and good governance can help Brazil, Russia, India, China, South Africa, and Turkey in achieving carbon neutrality. Considering the period of analysis from 2000 to 2020 and utilizing robust econometric methods, it is observed that the environmental consequences vary across different components of financial globalization. In particular, the results validate the pollution haven hypothesis by confirming the carbon emission-boosting effect of de facto financial globalization indicators. In contrast, the pollution halo effect hypothesis is verified by the finding of the carbon emission-abating effect of de jure financial globalization indicators. Besides, promoting good governance is evidenced to impose carbon emission-mitigating impact in the long-run. The findings also authenticate the existence of the Environmental Kuznets Curve (EKC) hypothesis for the emerging countries of concern. Finally, for both the short and long runs, it is found that the non-renewable to renewable energy transition contributes to lower discharges of carbon dioxide, while urbanization results in the amplification of the carbon emission figures. Considering these critically important findings, it is necessary for these countries to impose restrictions on the influx of unclean foreign direct investment, facilitate and ease the investment process for foreign investors for investing in environment-friendly projects, promote good governance, and adopt green economic growth and sustainable urbanization policies by developing their respective renewable energy sectors.