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Effects of foreign aid and energy aid inflows on renewable and non-renewable electricity production in BRICS countries

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Abstract

We empirically examine the effects of overseas aggregate aid and energy aid inflows on renewable and non-renewable electricity production in selected BRICS countries (i.e., Brazil, India, China, and South Africa) from 1995 to 2015. Economic growth, foreign direct investment inflows, and trade openness are control variables in electricity production functions. The results from employing fully modified ordinary least square and dynamic OLS techniques indicate that economic growth, inflows of aggregate aid, energy aid, and foreign direct investment promote renewable electricity production, while trade openness reduces it. We also find that aggregate aid and energy aid inflows reduce the non-renewable electricity production, while economic growth, foreign direct investment inflows, and trade openness promote it. Moreover, our study is unique and adopts different panel estimators, ensuring the robustness of the research findings. Our findings suggest that the BRICS economies’ march towards a sustainable environment becomes possible if policymakers, in their climate mitigation policy, encourage greater investments of overseas aggregate aid and energy aid inflows toward renewable electricity production.

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Fig. 1

Source: World Development Indicators. The World Bank; Total population, GDP in constant 2015 US$, and CO2 emissions (kt)

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Data availability

The data for the study can be obtained from https://databank.worldbank.org/data/reports.aspx?source=world-development-indicator, https://www.aiddata.org/data/aiddata-re, and https://stats.oecd.org by following the codes given in the data and methodology. The data are also attached along with submission.

Notes

  1. Developing countries are responsible for 63 percent of current carbon emissions (see at https://www.cgdev.org/media/developing-countries-are-responsible-63-percent-current-carbon-emissions).

  2. The simple reason is that economies being developed are capable of improving income distribution among the rich and poor people due to having effective income distribution and governance policies. As a result, all people in developed economies are equally better off that enable them to afford clean energy from the market and also use clean energy in both consumption and production process. Subsequently, sustainable environmental quality is ensured in developed economies once consumers and producers use and produce renewable energy.

  3. https://www.statista.com/statistics/1015424/investment-renewable-energy-share-gdp-globally/

  4. Please see the “Related studies” section for more details.

  5. The study uses overseas aggregate aid for foreign total aid and also uses overseas energy aid for foreign energy aid throughout the manuscript.

  6. https://science.thewire.in/environment/india-carbon-emissions-rich-poor-households/

  7. https://www.statista.com/statistics/799098/global-clean-energy-investment-by-country/

  8. China is the top electricity producer, while India is the third largest electricity producer in the world (https://www.nsenergybusiness.com/features/top-electricity-generating-countries/).

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Acknowledgements

We are thankful to the Editor of this journal. We also thank the reviewers for their valuable input in improving this manuscript to its current form. Finally, we are thankful to the DSC members for their kind suggestions provided during the PhD work presentation of the third author. This paper is a part of his PhD work.

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Authors and Affiliations

  1. School of Social Sciences and Humanities, B.S. Abdur Rahman Crescent Institute of Science and Technology, Tamil Nadu, 600048, India

    Muhammed Ashiq Villanthenkodath

  2. Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, West Medinapur, 721302, West Bengal, India

    Mantu Kumar Mahalik & Gupteswar Patel

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  1. Muhammed Ashiq Villanthenkodath
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  3. Gupteswar Patel
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Contributions

Muhammed Ashiq Villanthenkodath: conceptualization, data curation, software, investigation, writing—original draft preparation. Mantu Kumar Mahalik: supervision, writing-introduction, reviewing, conclusion, editing overall draft and restructuring, visualization and results cross-checking. Gupteswar Patel: conceptualization, data curation, software, writing—original draft preparation, policy implications.

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Correspondence to Mantu Kumar Mahalik.

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Villanthenkodath, M.A., Mahalik, M.K. & Patel, G. Effects of foreign aid and energy aid inflows on renewable and non-renewable electricity production in BRICS countries. Environ Sci Pollut Res 30, 7236–7255 (2023). https://doi.org/10.1007/s11356-022-22730-5

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