Energy Resilience, Digitalization, and Sustainable Development: Evidence on Carbon Emissions and Growth Trade‐Offs in BRICS Economies

ABSTRACT

This study explores the growth‐environment trade‐off for the BRICS economies to trace how energy resilience influences carbon emissions and sustainable development, a composite measure of environmental, social, and economic outcomes. Energy resilience is measured as a composite index that captures three aspects of the energy system: technical reliability in delivery infrastructure, exposure through energy intensity, and the diversity of supply sources. In addition, we include digitalization, economic growth, environmental innovation, natural resources, financial development, and globalization in the analysis. Stationarity is confirmed with a panel unit root test that allows structural break, heterogeneity and cross‐sectional dependence, while the method of moment quantile regression with fixed effects is estimated along with panel‐corrected standard errors and panel granger noncausality tests. The findings suggest that energy resilience leads to more sustainable development and lower carbon emissions across the whole distribution, whereas digitalization decreases carbon emissions but also reduces sustainable development, indicating that its ecological costs outweigh its development gains. Sustainable development is driven by financial development, natural resources, and globalization, whereas environmental policy stringency reduces it in the short term. Carbon emissions increase with economic growth at an increasing rate and show no environmental Kuznets curve turning point in the sample, whereas environmental innovation reduces emissions most strongly at higher quantiles. Our analysis reveals that BRICS economies need a series of policies that can balance growth–environment trade‐offs for sustainability.