Nexus Between Environment and Informal Economy: Analysis of BRICS Economies

Abstract

This paper examines the effects of informal economic activities on the environmental degradation for the BRICS nations, with emphasis on use of energy, ecological footprints and socio-economic conditions of these nations. The study considers empirical analysis of the BRICS economies, by means of a panel data set for the period 2000–2020, by using important environmental indicators like carbon-di-oxide (CO₂) and ecological footprints (EFs). Long-run associations have been estimated by applying econometric techniques like dynamic ordinary least square (OLS) and fully modified OLS. The study reveals important implications for BRICS economies because in the long-run, the informal activities bear negative impact on environmental quality leading to a fall in the degradational indicators. The study is significant in the sense that it finds that good governance is required along with strong pollution control policies and social reform for the improvement in the environmental quality, so does the emphasis on the use of renewable energy because the use of non-renewable energy hurts the environment in the presence of informal economic activities. Our study has important policy findings as it prescribes that formalization of informal activities along with economic growth and good governance which ensure use of renewable energy can help to achieve green growth and sustainability.

Citation

Chatterjee, N. (2024), "Nexus Between Environment and Informal Economy: Analysis of BRICS Economies", Pal, M.K. and Das, P. (Ed.) Informal Manufacturing and Environmental Sustainability, Emerald Publishing Limited, Leeds, pp. 175-190. https://doi.org/10.1108/978-1-83549-998-620241013