Determinants of Load capacity factor in BRICS countries: A panel data analysis

Abstract

Several developing markets, such as Brazil, Russia, India, China, and South Africa (BRICS), are facing challenges in attaining the targets set with regard to the Sustainable Development Goals (SDGs). While previous studies have extensively examined the Environmental Kuznets Curve in BRICS nations, focusing on other proxy of environmental degradation like CO2 emissions and ecological footprint, little attention has been given to the Load Capacity Curve (LCC) hypothesis specifically in relation to emerging economies. Consequently, there exists a gap in the literature regarding the validation of the LCC hypothesis for these economies. To bridge this gap, our research intends to assess the validity of the LCC hypothesis in the context of the BRICS countries. Specifically, we investigate the impact of biomass energy and social globalization on the load capacity factor (a proxy for ecological quality) in the BRICS countries from 1990 to 2018, while considering the roles of economic growth and natural resources. Additionally, we explore the development of an SDG framework tailored for the BRICS nations, which can serve as a blueprint for other emerging economies. To analyze the data, we employ the Method of Moments‐Quantile‐Regression (MMQR) approach along with long‐run estimators. The findings of the MMQR analysis reveal that natural resources, social globalization, and gross domestic product have adverse effects on ecological quality, while biomass energy exhibits a positive influence on ecological quality. Furthermore, our research validates the LCC hypothesis for the BRICS economies. We also observe evidence of causality between the load capacity factor and its determinants. Based on our investigation, we recommend a transition in energy policies from hydrocarbon energy to sustainable energy options by implementing innovative approaches to biomass technology that can enhance conversion efficiency. Implementing these policy changes will not only enhance ecological quality but also align the SDG targets.

Foreign investments and load capacity factor in BRICS: the moderating role of environmental policy stringency

“…In lieu of the traditional EKC hypothesis, the load capacity factor (LCF), which is an environmental quality indicator, is also investigated in research based on the load capacity curve (LCC). This theory, which takes into account the potential U-shaped link between economic growth and environmental quality, states that environmental quality first declines as income rises and then gradually increases until national income reaches a particular level (Yang et al 2023 ; Pata and Destek 2023 ; Caglar et al 2023 ; Pata et al 2023 ; Kartal and Pata 2023 ; Jin et al 2023 ; Pata et al 2024 ).…”