Green growth at risk: the role of geopolitical risk and economic policy uncertainty on green production practices

Abstract

The rapid growth of emerging economies is making these countries integrated with the global economy. This has made their economic growth more prone to the risk factors, specifically associated with the geopolitical scenario of the world and the uncertainty of economic policies. The available literature leaves a gap in this regard. How could these economies strive for sustainable development without losing the pace of their economic growth in uncertainties? The panel of BRICS—Brazil, Russia, India, China, and South Africa—is chosen for this study over the period starting from 1990 to 2020. To address the problem statement, the present study builds a green production model that explains how geopolitical risk (GPR) and economic policy uncertainty (EPU) affect green production practices. The Panel Quantile Regression (PQR) approach has been applied to make an intensive analysis. The empirical results reveal that geopolitical risk and economic policy uncertainty negatively impact the green production practices in BRICS economies. This study significantly contributes to the existing theories, such as Risk and Return Theory and Real Option Theory, by explaining the implications of geopolitical risk and economic policy uncertainty on green production practices. This study is also helpful for the policymakers of the BRICS economies to attain certain sustainable development goals (SDGs) like SDG 09 (focusing on innovations relating to industry), SDG 12, (ensuring consumption as well as production in responsible manner), SDG 13 (works for changing climate), SDG 16 (targeting peace with justice and institutional performance), and SDG 17 (partnerships for securing mutual goals).