The asymmetric effect of technology shocks on CO2 emissions: a panel analysis of BRICS economies

Technological innovation positively contributes to economic development in BRICS countries; their environmental consequences cannot be ignored. Thus, it is imperious to explore the impact of technological shocks on environmental quality. We used ARDL and NARDL models to draw empirical consensus on the data set from 1990 to 2019 for BRICS economies. The results of ARDL model reveal that technological shocks positively affect carbon emissions in the long-run and short-run. The findings of NARDL model reveal that positive shocks in technology positively affect carbon emissions in the long-run and short-run, implying that an increase in technological development triggers an increase in carbon emissions. However, the negative shocks in technology have a negative impact on carbon emissions in the long-run, inferring that a reduction in technological development leads to a decrease in carbon emissions. The negative shock in technology has no significant impact on carbon emissions in the short-run. The findings emphasize the importance of environmental friendly technology to achieving sustainable development goals.