Achieving regional sustainability and carbon neutrality target in Brazil, Russia, India, China, and South Africa economies: Understanding the importance of fiscal decentralization, export diversification and environmental innovation

AbstractReaching decarbonization goals has become a top focus for several industrialized and emerging economies globally. The greatest effect of human behavior is global warming. Utilizing fiscal decentralization (FDST), export diversification (EDI), and environment‐related technological innovation (ERTI) may be necessary to address global pollution and accomplish environmental sustainability goals. Additionally, these strategies could aid various levels of government and nations in pursuing what they define as sustainable development. This study evaluates the combined benefits of FDST, EDI and ERTI in meeting the environmental sustainability goals of the Brazil, Russia, India, China, and South Africa (BRICS) economies from 1970 to 2020. Using the augmented mean group method, the long‐run dynamic equilibrium between the chosen variables is examined. The findings demonstrate that while the adoption of ERTI and renewable energy (REC) benefits the environment, EDI, FDST, and economic growth exacerbate environmental deterioration. Our findings suggest that the BRICS countries should proceed cautiously when adopting FDST and EDI plans. The adoption of ERTI and REC should be promoted by the government to increase environmental sustainability.