Abstract
In this paper, we assess the effects of fiscal policy on load capacity factor using data spanning from 1990 to 2018 in BRICS nations (Brazil, Russia, China, India, and South Africa). Unlike both CO2 emissions and ecological footprint, the load capacity factor captures both the demand and supply sides of the environment. This research leverages on co-integration test, second-generation unit root tests, and the novel panel nonlinear autoregressive distributed lag (PNARDL). The results revealed that the major contributors to environmental deterioration are economic expansion and nonrenewable energy, while environmental sustainability is attributed to increased renewable energy. Furthermore, a positive shock in taxation revenue increases the quality of the environment while positive (negative) shocks in government expenditure decrease environmental quality. In affirming the PNARDL testing approach findings, the current study employed the pool mean group (PMG) and mean group (MG) estimators to assess the linkage between the independent and dependent variables. The results of the MG and PMG estimators align with the panel nonlinear ARDL results. Besides, the panel causality test also revealed unidirectional causality from renewable energy, nonrenewable energy, economic growth, government expenditure, and taxation revenues to load capacity factor. These findings affirm the findings of the PNARDL testing approach. The study suggests that the BRICS nations’ governments should use the fiscal policy to enhance ecological sustainability by promoting investment and projects in renewable sources.
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Adebayo, T.S., Samour, A. Renewable energy, fiscal policy and load capacity factor in BRICS countries: novel findings from panel nonlinear ARDL model. Environ Dev Sustain 26, 4365–4389 (2024). https://doi.org/10.1007/s10668-022-02888-1
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DOI: https://doi.org/10.1007/s10668-022-02888-1