Navigating the environmental impact of geopolitical risk and economic policy uncertainty: Evidence from load capacity curve hypothesis in BRICST economies

Abstract

Global warming, climate disruptions, and environmental challenges are significant concerns in the present era, placing socioeconomic burdens on nations globally as humanity progresses at an unprecedented pace. In this framework, the load capacity factor (LCF) has evolved to demonstrate the environment‐damaging behavior of the population and nature's reaction to such damage. Thus, improving LCF by economies has become crucial for attaining the sustainable development goals (SDGs). In doing so, the current study scrutinizes the influence of geopolitical risk (GPR), economic policy uncertainty (EPU), economic growth (EG), renewable energy consumption (REC), natural resource rent (NRR), and financial development (FD) on LCF in BRICST economies during 1990–2020. We use the panel quantile regression (PQR) technique for empirical outcomes. The PQR technique can capture the heterogeneous role of explanatory factors. The empirical results of the PQR method validate the U‐shaped LCC hypothesis through the non‐linear evaluation of EG and LCF. Furthermore, results reveal that GPR, EPU, and FD adversely affect environmental quality. However, REC and NRR's supportive role in improving LCF is found. Keeping in view these empirical results, the study suggests an extensive policy framework for attaining the objectives of SDG 13 (climate change), SDG 08 (decent work and economic growth ), SDG 16 (peace for sustainable development), SDG 12 (responsible consumption and production), and SDG 07 (clean energy) in BRICST economies.