Green financing and sustainable environmental development: An empirical study of BRICS-I countries

This study examines the relationship between environmental policies and the Social Progress Index (SPI) in BRICS-I over the period 1994–2020. Using panel data and the FGLS method, three regression models are estimated to analyze the short- and long-term effects. Key findings show that green taxes have a positive impact on pollution reduction in the short term, but face adecline in effectiveness in the long term. Economic growth shows an inverted U-shaped relationship with CO2, with initial positive effects and a relative inversion at advanced stages, and green growth shows a U-shaped pattern with CO2. Social variables such as access to water and public health spending have the largest persistent effects on SPI, and the estimated coefficients show that in BRICS-I countries, CO2 and green taxes have the largest effects on SPI. The results also support the “resource curse” hypothesis, whereby dependence on fossil resources has persistent negative effects on SPI. The analysis of the final effects shows that the impact of green taxes on SPI varies at different levels of pollution, with the strongest effect at the lowest levels of pollution. By introducing a “TIPP” (Targeted, Integrated, Participatory and Proportional) framework for policymaking, this study shows that a smart combination of environmental policies, social investment and institutional reforms can help emerging economies achieve sustainable development.