The Growth–Energy–Emissions Trilemma: Evidence from BRICS

Economic development is a significant factor that indicates the health of a nation. BRICS is one of the fastest-growing regions in the current time period. It is an interesting geographical area to understand the interplay of economic development with other essential elements of development like international capital investment flow and openness to trade. At the same time, in the name of development, how much a nation is sustainable is equally important to create more desirable results in the long term, considering factors like energy utilisation and carbon emission. This study takes account of the above factors, and its objective is to understand the long-term equilibrium relationship among economic development, inward foreign direct investment, openness to trade, fossil fuel energy consumption, and carbon dioxide emission in the BRICS region, considering the data from 1990 to 2022. Data is analysed using the Johansen Fisher Panel Cointegration test and the Dumitrescu Hurlin Panel Causality Test. Results of our study indicate that there exists cointegration among the variables in the long run. Causality study indicates a relationship among fossil fuel energy consumption, economic development and carbon dioxide emission, carbon dioxide emission and inward foreign direct investment. This study emphasizes the need for BRICS countries to implement strong green policies, enhance clean energy use, and invest in technology to ensure sustainable economic growth while reducing environmental damage.