Trilemma association of energy consumption, carbon emission, and economic growth of BRICS and OECD regions: quantile regression estimation

Recent research has shown a huge impact of non-renewable energy (NRE) production on environmental health. In this context, this work analyzes the effects of GDP growth and long- and short-term consumption of renewable and non-renewable energy (RE and NRE, respectively) on carbon emission in BRICS and OECD economies. The quantile autoregressive distributed lag (QARDL) model was employed on the panel data from 1980 to 2016. Findings suggest a negative GDP-carbon emission correlation and a positive NRE-carbon emission correlation in the considered economies. Furthermore, carbon emission decreases with increase in gross capital formation, whereas trade openness does not have any significant effect on carbon emission. It has been determined that the application of the error correction method (ECM) has less effect on energy consumption as compared to the past levels and changes in energy consumption. In the long-term, a positive correlation of carbon emission and energy consumption is observed, whereas limited short-term effects of energy consumption on carbon emission are observed. Therefore, an RE-based energy production approach is recommended in the selected region for the future projects.