Analyzing the role of environmental policy innovations and natural resource management in driving circular economy forward: Evidence from BRICS economies.

Abstract

In understanding the dynamics of a circular economy, natural resources require careful management and mitigation strategies to prevent its detrimental effects on sustainable practices. Natural resource management and environmental policy innovations involve the balanced use and conservation of natural resources for sustainable and circular economic practices. This study analyses the impact of natural resource protection, natural resource depletion, and environmental policy innovations on circular economy using panel data from BRICS economies from 2000 to 2020. The study employed an Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) econometric method along with cross-sectional dependence, 2nd generation unit root tests, heterogeneity, cointegration, and JKS Granger non-causality. Both econometric methods revealed that natural resource protection and environmental policy innovations accelerate circular economy practices. In contrast, natural resource depletion and non-renewable energy consumption decelerate the circular economy practices in the BRICS economies. Furthermore, the study found that natural resource depletion has a nonlinear impact, and higher depletion has the worst impact on the circular economy. Significant cointegration and causality have been observed. The study suggests natural resource conservation and transition to renewable resources to enhance the circular economy in BRICS economies.