The Role of Energy Productivity in Green Transition: Evidence from BRICS Economies

Improving environmental quality remains a significant challenge for nations worldwide. Energy productivity is widely considered as one of the main indispensable solutions to control greenhouse gas emissions and improving environmental quality. However, the debate between consumption-based accounting and production-based accounting of carbon emissions has gained increasing prominence in climate policy discussions, as the traditional production-based approach often overlooks emissions embodied in international trade. Against this backdrop, this study examines the role of energy productivity as a climate policy instrument in mitigating both consumption-based and territorial (production-based) CO₂ emissions in BRICS economies over the period 1990–2023. This study presents a novel methodology to capture distributional effects, offering new insights into how energy productivity influences environmental sustainability at different emission levels. Using the method moment quantile regression approach, we find that energy productivity is an important determinant of both consumption-based carbon emissions and territorial carbon emissions. Moreover, renewable electricity output and exports reduce both types of carbon emissions. Interestingly, imports increase consumption-based carbon (CCO2) emissions while decrease territorial-based carbon (TCO2) emissions in sample countries. Based on the results, it is inferred that increasing energy productivity lower the need for energy utilization, which ultimately improve environmental performance.