Role of public-private partnerships investment in energy and technological innovations in driving climate change: evidence from Brazil

Abstract

This study aims to examine the impact of public-private partnerships (PPP) investment in energy, technological innovations (TI), economic growth (EG), exports, and foreign direct investment (FDI) on CO₂ emissions in Brazil over the period from 1984 to 2018. In doing so, we employ the Ng-Perron unit root test to examine the stationarity and autoregressive lag distributed (ARDL) model for cointegration between CO₂ emissions and its determinants. The outcomes are as follows: first, in the long run, the PPP investment in energy deteriorates the environmental quality by increasing CO₂ emissions, while TI has a significant negative effect on CO₂ emissions. It is also found that the exports and FDI degrade the environmental quality and the relationship between EG and CO₂ emissions is inverted U-Shaped, presence of the EKC hypothesis. Second, in the short run, PPP investment in the energy sector is negatively influencing, while TI has a positive association with carbon emissions. The empirical findings provide new insights for policymakers to regulate PPP investment in the energy sector for the improvement of environmental quality in Brazil. Graphical abstract.

Keywords: ARDL; Brazil; CO2 emissions; Energy; Public-private partnerships investment; Technological innovations.