Abstract
In light of environmental challenges, the BRICS countries have stepped to the forefront of
economic progress versus environmental sustainability debate. Not only has energy consumption
increased rapidly in these countries, but the economic progress and urbanization, mainly driven
by intensive fossil fuel production, have also led to higher levels of income inequality. The
dynamics of the interplay between economic growth, urbanization, and income inequality on the
one hand and environmental sustainability on the other have yet to be fully understood in the
BRICS context. This paper aims to contribute to the ongoing debate by assessing a combination
of three Environmental Kuznets Curves (EKC) based on the GDPpc-emissions nexus, the income
inequality- emissions nexus, and the urbanization-emissions nexus. Using the Autoregressive
Distributed Lag (ADRL) and Panel Fully Modified Least Squares (FMOLS) models, we find an
inverted U-shape EKC between GDP and carbon emissions, an inverted U-shaped EKC between
income inequality and carbon emissions, and a U-shaped EKC between urbanization and carbon
emissions. The inverted EKC between GDPpc and carbon emissions suggests that in the long
run sustainable carbon reduction is possible alongside economic growth, but urbanization’s
U-shaped impact on emissions might hinder this. Moreover, the inverted U-shaped relationship
between income inequality and carbon emissions indicates a potential long-run trade-off
between reducing both inequality and carbon emissions. Factors behind this relationship may
vary significantly and include institutions- and country-specific factors, yet policymakers in the
BRICS countries will do well attempting to better understand the dynamics behind urbanization and inequality as it will enable them to adopt more effective holistic policies aiming to improve
energy efficiency, reduce fossil fuel dependence, and build economic systems contributing to
faster economic growth, lower inequality and greater environmental sustainability.