Abstract
Improving environmental quality remains a significant challenge for nations worldwide. Energy productivity is widely considered as one of the main indispensable solutions to control greenhouse gas emissions and improving environmental quality. However, the debate between consumption-based accounting and production-based accounting of carbon emissions has gained increasing prominence in climate policy discussions, as the traditional production-based approach often overlooks emissions embodied in international trade. Against this backdrop, this study examines the role of energy productivity as a climate policy instrument in mitigating both consumption-based and territorial (production-based) CO₂ emissions in BRICS economies over the period 1990–2023. This study presents a novel methodology to capture distributional effects, offering new insights into how energy productivity influences environmental sustainability at different emission levels. Using the method moment quantile regression approach, we find that energy productivity is an important determinant of both consumption-based carbon emissions and territorial carbon emissions. Moreover, renewable electricity output and exports reduce both types of carbon emissions. Interestingly, imports increase consumption-based carbon (CCO2) emissions while decrease territorial-based carbon (TCO2) emissions in sample countries. Based on the results, it is inferred that increasing energy productivity lower the need for energy utilization, which ultimately improve environmental performance.
References
Aduba J.J., Asgari B., Ennajih Y., Shimada K. (2025) Impact of learning on energy consumption and energy efficiency: Empirical evidence from manufacturing industry. Journal of Cleaner Production, 492, 144843. https://doi.org/10.1016/j.jclepro.2025.144843
Ahmad M., Khan Z., Rahman Z.U., Khattak S.I., Khan Z.U. (2021) Can innovation shocks determine CO₂ emissions (CO₂e) in the OECD economies? A new perspective. Economics of Innovation and New Technology, 30(1), 89–109. https://doi.org/10.1080/10438599.2019.1684643
Ahmadi Z., Frikha W. (2023) Consumption-based carbon dioxide emissions and their impact on energy productivity in the G7 countries. Journal of the Knowledge Economy, 14, 3260–3275. https://doi.org/10.1007/s13132-022-00966-3
Ali S., Dogan E., Chen F., Khan Z. (2021) International trade and environmental performance in top ten‐emitters countries: The role of eco‐innovation and renewable energy consumption. Sustainable Development, 29(2), 378–387. https://doi.org/10.1002/sd.2153
Al-Mulali U., Ozturk I. (2016) The investigation of environmental Kuznets curve hypothesis in the advanced economies: The role of energy prices. Renewable and Sustainable Energy Reviews, 54, 1622–1631. https://doi.org/10.1016/j.rser.2015.10.131
Alola A.A., Bekun F.V., Sarkodie S.A. (2019) Dynamic impact of trade policy, economic growth, fertility rate, renewable and non-renewable energy consumption on ecological footprint in Europe. Science of the Total Environment, 685, 702–709. https://doi.org/10.1016/j.scitotenv.2019.05.139
Amin M., Zhou S., Safi A. (2022) The nexus between consumption-based carbon emissions, trade, eco-innovation, and energy productivity: Empirical evidence from N-11 economies. Environmental Science and Pollution Research, 29(26), 39239–39248. https://doi.org/10.1007/s11356-021-18327-z
Atalla T., Bean P. (2017) Determinants of energy productivity in 39 countries: An empirical investigation. Energy Economics, 62, 217–229. https://doi.org/10.1016/j.eneco.2016.12.003
Atasoy B.S. (2017) Testing the environmental Kuznets curve hypothesis across the US: Evidence from panel mean group estimators. Renewable and Sustainable Energy Reviews, 77, 731–747. https://doi.org/10.1016/j.rser.2017.04.050
Blesl M., Das A., Fahl U., Remme U. (2007) Role of Energy Efficiency Standards in Reducing CO2 Emissions in Germany: An Assessment with TIMES. Energy Policy, 35(2), 772–785. https://doi.org/10.1016/j.enpol.2006.05.013
Cao S., Zhou Q. (2022) Common correlated effects estimation for dynamic heterogeneous panels with non-stationary multi-factor error structuresю. Econometrics, 10(3), 29. https://doi.org/10.3390/econometrics10030029
Coskun Y., Atasoy B.S., Morri G., Alp E. (2018) Wealth Effects on Household Final Consumption: Stock and Housing Market Channels. International Journal of Financial Studies, 6(2), 57. https://doi.org/10.3390/ijfs6020057
Ding Q., Khattak S.I., Ahmad M. (2021) Towards sustainable production and consumption: Assessing the impact of energy productivity and eco-innovation on consumption-based carbon dioxide emissions (CCO₂) in G-7 nations. Sustainable Production and Consumption, 27, 254–268. https://doi.org/10.1016/j.spc.2020.11.004
Gunawan J., Lee J.C., Putri A.N.A., Tin S. (2023) Decarbonisation: A Case Study of Malaysia. Foresight and STI Governance, 17(4), 32–44. https://doi.org/10.17323/2500-2597.2023.4.32.44
Hajiyev N., Guliyev V., Abdullayeva S., Abdullayeva E. (2023) Energy intensity of the economy in the context of rethinking growth within a limited planet. Energy Strategy Reviews, 50, 101246. https://doi.org/10.1016/j.esr.2023.101246
Hassan T., Song H., Khan Y., Kirikkaleli D. (2022) Energy efficiency a source of low carbon energy sources? Evidence from 16 high-income OECD economies. Energy, 243, 123063. https://doi.org/10.1016/j.energy.2021.123063
Im K.S., Pesaran M.H., Shin Y. (2003) Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53–74. https://doi.org/10.1016/S0304-4076(03)00092-7
IMF (2023) Committed to Collaboration (IMF Annual Report 2023), Washington, D.C.: International Monetary Fund.
Johansen S. (1988) Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2–3), 231–254. https://doi.org/10.1016/0165-1889(88)90041-3
Kao C. (1999) Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90(1), 1–44. https://doi.org/10.1016/S0304-4076(98)00023-2
Kelly N. (2006) The Role of Energy Efficiency in Reducing Scottish and UK CO2 Emissions. Energy Policy, 34(18), 3505–3515. https://doi.org/10.1016/j.enpol.2005.07.019
Khan Z., Ali S., Umar M., Kirikkaleli D., Jiao Z. (2020) Consumption-based carbon emissions and international trade in G7 countries: The role of environmental innovation and renewable energy. Science of the Total Environment, 730, 138945. https://doi.org/10.1016/j.scitotenv.2020.138945
Kirikkaleli D., Sofuoğlu E., Abbasi K.R., Addai K. (2023) Economic complexity and environmental sustainability in eastern European economy: Evidence from novel Fourier approach. Regional Sustainability, 4(4), 349–358. https://doi.org/10.1016/j.regsus.2023.08.003
Lei W., Xie Y., Hafeez M., Ullah S. (2022) Assessing the dynamic linkage between energy efficiency, renewable energy consumption, and CO₂ emissions in China. Environmental Science and Pollution Research, 29(13), 19540–19552. https://doi.org/10.1007/s11356-021-17145-7
Li R., Li L., Wang Q. (2022) The impact of energy efficiency on carbon emissions: Evidence from the transportation sector in Chinese 30 provinces. Sustainable Cities and Society, 82, 103880. https://doi.org/10.1016/j.scs.2022.103880
Liu H., Yao P., Latif S., Aslam S., Iqbal N. (2022) Impact of green financing, FinTech, and financial inclusion on energy efficiency. Environmental Science and Pollution Research, 29, 18955–18966. https://doi.org/10.1007/s11356-021-16949-x
Melnik A., Naoumova I., Ermolaev K. (2023) Adapting Innovation Development Management Processes to Improve Energy Efficiency and Achieve Decarbonization Goals. Foresight and STI Governance, 17(1), 51–66. https://doi.org/10.17323/2500-2597.2023.1.51.66
Norman J., Clark G., Babajeva J., Sidorovskaya-Fretz N., Yu A., Han Y., Zhang M. (2024) Energy in the BRICS. Renewables to eclipse fossil fuels for half of the world's population, Covina, CA: Global Energy Monitor
Özbuğday F.C., Erbas B.C. (2015) How effective are energy efficiency and renewable energy in curbing CO2 emissions in the long run? A heterogeneous panel data analysis. Energy, 82, 734–745. https://doi.org/10.1016/j.energy.2015.01.084
Paramati S.R., Shahzad U., Doğan B. (2022) The role of environmental technology for energy demand and energy efficiency: Evidence from OECD countries. Renewable and Sustainable Energy Reviews, 153, 111735. https://doi.org/10.1016/j.rser.2021.111735
Pesaran M.H. (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74(4), 967–1012. https://doi.org/10.1111/j.1468-0262.2006.00692.x
Pesaran M.H. (2007) A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265–312. https://doi.org/10.1002/jae.951
Pesaran M.H., Yamagata T. (2008) Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50–93. https://doi.org/10.1016/j.jeconom.2007.05.010
Qin L., Malik M.Y., Latif K., Khan Z., Siddiqui A.W., Ali S. (2021) The Salience of Carbon Leakage for Climate Action Planning: Evidence from the Next Eleven Countries. Sustainable Production and Consumption, 27, 1064–1076. https://doi.org/10.1016/j.spc.2021.02.019
Rahman Z.U., Cai H., Khattak S.I., Hasan M.M. (2019) Energy production–income–carbon emissions nexus in the perspective of NAFTA and BRIC nations: A dynamic panel data approach. Economic Research-Ekonomska Istraživanja, 32(1), 3378–3391. https://doi.org/10.1080/1331677X.2019.1660201
Safi A., Chen Y., Zheng L. (2022) The impact of energy productivity and eco-innovation on sustainable environment in emerging seven (E-7) countries: Does institutional quality matter? Frontiers in Public Health, 10, 878243. https://doi.org/10.3389/fpubh.2022.878243
Santra S. (2017) The effect of technological innovation on production-based energy and CO₂ emission productivity: Evidence from BRICS countries. African Journal of Science, Technology, Innovation and Development, 9(5), 503–512. https://doi.org/10.1080/20421338.2017.1308069
Shabalov M.Y., Zhukovskiy Y.L., Buldysko A.D., Gil B., Starshaia V.V. (2021) The influence of technological changes in energy efficiency on the infrastructure deterioration in the energy sector. Energy Reports, 7, 2664–2680. https://doi.org/10.1016/j.egyr.2021.05.001
Steininger K.W., Bednar-Friedl B., Formayer H., König M. (2016) Consistent economic cross-sectoral climate change impact scenario analysis: Method and application to Austria. Climate Services, 1, 39–52. https://doi.org/10.1016/j.cliser.2016.02.003
Wahab S., Zhang X., Safi A., Wahab Z., Amin M. (2020) Does energy productivity and technological innovation limit trade-adjusted carbon emissions? Economic Research-Ekonomska Istraživanja, 34, 1896–1912. https://doi.org/10.1080/1331677X.2020.1860111
Wang C. (2011) Sources of energy productivity growth and its distribution dynamics in China. Resource and Energy Economics, 33(1), 279–292. https://doi.org/10.1016/j.reseneeco.2010.06.005
Wang K.H., Umar M., Akram R., Caglar E. (2021) Is technological innovation making world "greener"? An evidence from changing growth story of China. Technological Forecasting and Social Change, 165, 120516. https://doi.org/10.1016/j.techfore.2020.120516
Westerlund J. (2007) Testing for error correction in panel data. Oxford Bulletin of Economics and Statistics, 69(6), 709–748. https://doi.org/10.1111/j.1468-0084.2007.00477.x
This work is licensed under a Creative Commons Attribution 4.0 International License.