Human Capital Development, Foreign Investment, and Renewable Energy: Pathways to Environmental Sustainability in BRICS Economies

Abstract

This study explores the effect of human capital, foreign direct investment (FDI), renewable energy, and gross domestic product (GDP) on environmental sustainability in BRICS countries over the period 2000–2023. Using the DCCE estimator to account for cross-sectional dependence and heterogeneity, the results show that human capital and renewable energy significantly lower CO₂ emissions, highlighting their key role in environmental sustainability. In contrast, FDI and GDP growth contribute to higher CO₂ emissions, suggesting that economic expansion and foreign investment, in their current forms, may undermine environmental quality in the BRICS region. These results offer important policy implications. First, investment in human capital should be prioritized, with a focus on education, environmental awareness, and clean technology skills. Second, BRICS countries must accelerate the shift to renewable energy through supportive policies, infrastructure development, and incentives. Third, governments should encourage green FDI by imposing environmental standards and offering incentives for sustainable projects. Fourth, growth strategies must integrate environmental concerns, emphasizing low-carbon sectors and sustainable practices. Lastly, regional cooperation among BRICS nations can facilitate shared innovation and joint climate action. Aligning economic development with sustainability goals is crucial for ensuring long-term ecological resilience in these emerging economies.