Impact of Energy Poverty, Energy Efficiency and Public Debt on Environmental Quality in BRICS

Abstract

This study examines the relationship amid energy poverty, public debt, renewable energy, energy efficiency, and CO₂ emissions in BRICS economies from 2000 to 2023, using the Dynamic Common Correlated Effects (DCCE) methodology. The findings reveal that energy poverty and public debt significantly increase CO₂ emissions in the long run, reflecting the environmental consequences of limited energy access and debt-driven economic activities. Energy efficiency plays a crucial role in reducing emissions by promoting cleaner energy consumption and minimizing waste. However, renewable energy does not exhibit a momentous long-run impact on CO₂, suggesting that its current integration is insufficient for substantial CO₂ reduction. In the short run, public debt remains a key driver of emissions, while renewable energy and energy efficiency contribute to moderate reductions. These findings underscore the complex interplay between economic and environmental factors in BRICS economies. Addressing energy poverty, ensuring sustainable debt management, and enhancing energy efficiency are critical for mitigating emissions. Additionally, stronger policy support is needed to improve the effectiveness of renewable energy adoption. A balanced approach integrating clean energy access, fiscal responsibility, and sustainable policies is essential to achieving long-term environmental sustainability and economic resilience in BRICS nations.