India
Source: www.globalasia.org

As the horrific Russian war against Ukraine proceeds without any clear end in sight, the world community yearns for a return to peace. A plausible theory to stop the bloodshed is to bring severe enough pressure on the Kremlin to force a halt to the onslaught. After all, even Russian military experts recognize that the military campaign, at least as originally conceived, relied on certain false assumptions.1 The flood of outrage in the West has prompted many analysts to conclude that China could hold the key to the whole debacle. According to this logic, Moscow is so isolated and sufficiently weakened that it could not defy Beijing, if the Chinese leadership exercised its leverage to try and halt the Kremlin's war.

Unfortunately, those hoping to persuade China to take significant moves to isolate or counter Russia are likely to be disappointed, as they underestimate the breadth and depth of the China-Russia quasi-alliance that has developed steadily over the last three decades. Beijing will certainly try to avoid a major diplomatic and economic backlash, distancing itself in most respects from the Russian invasion. Nevertheless, such costs are understood to be part of the overall alignment that is broadly held to be fundamental to China's foreign policy, and most critically to its national security. Some near-term improvement in US-China relations resulting from the current crisis and such "triangular dynamics" cannot be ruled out. To be sure, such an improvement in US-China relations would be most welcome. But a full-scale realignment of the world order resulting from a rupture in Russia-China relations remains extremely unlikely. The analysis below will focus on the security dimension of the current crisis and its impact on China-Russia relations, including certain ramifications for the critical Taiwan issue and security across the Asia-Pacific region.

In a piece in early March, think-tank analyst Yun Sun of the Stimson Center applied the common logic in Western capitals of assuming that the China-Russia relationship is brittle and might be broken in the present crisis.2 She contends that "the Ukraine crisis illustrates a difficult reality: In response to increasing strategic competition with the United States, China is turning to Russia for support, despite misalignment between Beijing and Moscow's national interests, as well as Russia's history as a destructive and exploitative neighbor." She concludes: "There is no better example of a 'marriage of convenience' than this, and China will pay dearly for this choice." She makes many substantive points to support her case that the China-Russia alignment is not stable and may form a "delicate equilibrium" that will be "disrupted by any structural change." For instance, she notes that China's trade relationship with Vietnam is larger than that with Russia. Sun's premise seems to rely heavily on a rational or even a pure economic weighing of the costs and benefits for Beijing. And she also contends that this alignment is partly the result of what she calls Xi Jinping's "Russia complex," or Russia affinity, but that "some Chinese experts" are opposed to continuing the close Russia-China relationship. Leading American thinkers are seemingly in agreement with Sun. Paul Krugman, writing in The New York Times in early March, suggested that China cannot save Russia in its current predicament, because among many other reasons, Russia will not agree to become a "Chinese client state," and the two states are "very far apart geographically."3

Some of this reasoning could be flawed. For instance, Russia might have to swallow "junior partner" status since it lacks other options, and Moscow might see a more dynamic relationship with China as an opportunity to "pivot to the East" fully and develop Siberia much more intensively — an old Russian dream that goes back centuries. Likewise, Sun might concede that Xi's apparent Russia affinity may matter a lot, since his imprint on Chinese foreign and defense policy, and Chinese politics more generally, knows no boundaries.

Continuing Relations

Rather than waiting for some chimerical rupture in China-Russia relations then, it might be better to see the continuing dynamic development of China-Russia relations as part of a larger context. I happened to be in Beijing in 2017 and got to witness a celebration of the 100th anniversary of the Russian Revolution in the Central Party Museum — seemingly more fervent than anything in Moscow or St. Petersburg. Yes, intimate Russia-China ties go back a very long way. Gilbert Rozman notes that these linkages have deep historical and cultural resonance that goes beyond simple calculations of national interest. He writes: "there now exists strong correspondence in regime interests, which can be traced to fundamental similarities in the reconstruction of national identity in the two countries." He continues: "The essence of the overlap is the existence of regimes fearful of values associated with the international community and beholden to the legacy of traditional communism, having the goal of changing the rules of the global system. They proceed to define 'core national interests' in similar ways ..."4

China's reaction to Russia's invasion, therefore, is not surprising. In many respects, this behavior tracks closely a pattern from previous crises, whether the 2014-15 Crimea annexation and subsequent Donbas War or Russian intervention in Syria in 2015. During that time, Beijing made strenuous and very public efforts to support Moscow, from Xi's attendance at the Victory Parade in 2015 to the Chinese fleet's first foray into the Black Sea during that same year. More critical than these diplomatic and military demonstrations of support, however, was the 30-year gas deal for US$400 billion inked in May 2014 that helped stabilize Russia's economy in the wake of the initial round of major economic sanctions. Those actions seem to have been a "practice run" for the disorienting and tragic events unleashed by the Russian invasion of Ukraine in February 2022. Indeed, Beijing's hostility to US pressure was amply evident in a Chinese editorial that followed the meeting between Yang Jiechi and Jake Sullivan on March 14: "The knot tied by the United States itself should not and cannot be completely untied by China. Moreover, China and the United States must first clarify their own relations before they can better co-ordinate their positions on third-party issues."5

On the military-security side, relations between China and Russia are thoroughly institutionalized and should not be underestimated, even if it is not formally an "alliance." In late 2021, they organized an unprecedented and rather brazen joint naval exercise through the Tsugaru Strait of Japan, demonstrating a high-level deployment of naval might for diplomatic purposes. At about the same time, the Russian and Chinese bomber forces conducted a second joint strategic air patrol over the Sea of Japan that reached down into the East China Sea as well. Such high-level exercises involving elite forces have become quite routine as the bilateral security relationship has expanded beyond simpler counter-terrorism exercises to encompass more complex subjects like heli-borne assault and anti-submarine warfare. The Eurasian giants are also conducting joint projects on sensitive subjects like early warning and cyber warfare. Since elite Chinese military officers study in Russian academies, it is hardly surprising that China's military media have been providing highly sympathetic reports on the Russian war in Ukraine.

Beijing's Choice

At this point in the crisis, US intelligence suggests that Moscow has requested military assistance from Beijing, including "surface-to-air missiles, drones, armored vehicles, logistics vehicles, and intelligence-related equipment."6 Whether that comes to pass or not is far from clear at this point, and preliminary signals suggest that China may decline to send lethal aid.7 Nevertheless, it is not difficult to imagine why China might actually comply with such a request. Aside from executing faithfully on a partnership that has been painstakingly built up over decades, Chinese military leaders could also want to test their equipment in battle and to gain greater access to the battlefield and related information to improve Chinese "after action" assessments, as well as to simply gain market share in Russia, where there is significant potential to sell arms in the future. There is an even more obvious explanation for possible Chinese agreement to send military aid to Russia: "An editor at Xinhua News Agency later posted on Weibo that China needs to emotionally and morally support Russia now since 'China will also need Russia's understanding and support when wrestling with America to solve the Taiwan issue once and for all.' "8

Indeed, there has been ample speculation regarding the impact of Russia's military campaign against Ukraine for a possible Chinese move against Taiwan. The conventional wisdom is likely correct that Ukraine has demonstrated that motivated soldiers protecting their own homes can be highly effective, even when deploying relatively simple infantry weapons. It would make sense if Chinese military planners are now rethinking what may have been over-optimistic assumptions concerning a prospective invasion of Taiwan. Yet it is also important to consider that Taiwan is much smaller than Ukraine geographically, while China's military budget is also considerably larger than Russia's. Moreover, if China attempts an invasion of Taiwan, its forces would be willing to pay enormous human and material costs. Thus, a wise lesson to take from the tragic Russian war in Ukraine might be that world leaders in all relevant capitals need to try even harder to reach compromises to beat back the "dogs of war."9

This article has focused primarily on security considerations, because they are primary drivers in the China-Russia relationship, but diplomatic and economic variables must also be analyzed closely. Chinese leaders will no doubt have noticed that many states, including even Israel, India and Brazil, have refused to condemn Russia or go along with stringent sanctions. In recent years, diplomatic co-operation between China and Russia has been evident on Iran, North Korea, and even in South Africa. The Russia-Ukraine War is not likely to alter the overall dynamic of China and Russia co-operation to develop a more multi-polar world. Likewise on the economic front, China will likely increase its trade and investment in Russia. The new war does not change the fundamental reality that the massive Chinese economy needs immense quantities of natural resources, and many of these lie just next door in Russia. With every round of Western sanctions against Russia, Beijing has increased its influence and access to Russian resources and this process is set to accelerate under the new conditions, even if some Chinese companies will pay a price in Western markets. As to whether Moscow will accept "junior status" in the relationship, it simply has no choice now. De-dollarization may be another major economic result of a consolidated Russia-China quasi-alliance.

Mediator?

A reasonable question concerns how and whether China might be able to serve as a mediator in the Russia-Ukraine War. The question is not superfluous for the simple reason that China, and only China, is perhaps the single country on earth that is not only trusted by Russia, but would also have some leverage over Moscow to gently nudge it in a peace-making direction. China's robust diplomatic and economic resources could also make it a useful mediator. Still, there would be significant risks for Beijing in taking up such a role, including the possibility of high-profile failure and also complicating its relationship with Moscow. So, it might be unlikely, but China acting in a group of concerned powers, perhaps together either with India or Israel, could play a positive role. China's prowess in UN peacekeeping is beyond dispute, and this could be enormously helpful.

The Russia-Ukraine War has shaken the world and presents a major test for the China-Russia relationship. Most signs, however, point to continuity. Russia has no choice but to align ever more closely with China. For Beijing, which was branded by NATO as a threat recently and has been grappling with an intensifying military rivalry with Washington for at least two decades, maintaining the close relationship with Russia is a relatively obvious choice. Clearly, many Chinese have misgivings about this course.10 But Xi's commitment to the relationship with Russia has deep roots and he will be buttressed by the pro-Moscow Chinese security establishment. Even as they seek to aid beleaguered Ukraine and punish Putin, the US and its allies would be wise to reflect on how the security architecture of Europe has dramatically failed to avert bloody conflict in the present circumstances. With a more complete and less emotional assessment of that failure, they may seek to act more cautiously and to proactively build a more inclusive security architecture for the Asia-Pacific.

France
Source: www.parisbeacon.com

No news about the BRICS countries has been heard for a long time. But after the Ukraine conflict, the club of emerging countries will have to decide where they stand on Russia.

Around three billion people live in the so-called BRICS countries, a huge economic area with equally huge political power. The association of emerging economies includes Brazil, Russia, India, China and South Africa. Following the Russian invasion, the remaining four countries assume special importance in the global reorganization of economic dependencies and political associations. They are suppliers of raw materials and trading partners, and can exert a decisive influence in the conflict with their political position.

For example, the alliance would have the possibility to support Russia with loans. "At the moment, the position of the BRICS is reserved, and there is still no effective political coordination to react to the sanctions of the United States and its closest partners in Europe," says Roberto Goulart, from the University of Brasilia, in an interview. with D.W.

Due to sanctions, according to Goulart, states are reluctant to lend to Russia through the BRICS development bank. The NDB (New Development Bank) raises money on the international market at lower rates, he recalls: "The BRICS are shying away from taking political positions in this scenario of great uncertainty."

Ignacio Bartesaghi, director of the International Trade Institute of the Catholic University of Uruguay, has a similar opinion, and considers that the other four BRICS countries are still in the reflection phase. "They have not yet defined a clear strategy. What is certain is that we are facing new alliances, coalitions and geostrategic associations," Bartesaghi explains to DW.

Larry Fink, director of Blackrock, the world's largest asset manager, believes that Russia's long-term disengagement from the world economy will cause serious disruption to economic relations between the BRICS. States would rethink what dependencies would exist and how they could be reduced. That could lead to some countries pulling out faster, Fink wrote in a letter to shareholders, quoted by the German daily. Frankfurter Allgemeine Zeitung (FACE).

Production centers in Mexico, Brazil, the United States or Southeast Asia could benefit from it. Brasilia, meanwhile, is already going on the offensive. The Brazilian Minister of Mines and Energy, Bento Albuquerque, has announced plans to increase oil production by up to ten percent by the end of this year. This is Brazil's contribution to the "stabilization of world energy markets," Albuquerque assured.

South Africa is also facing a historic decision. In view of rising gas prices and the emerging need for new economic projects, the African country urgently wants to secure its supplies and, according to the Amabhungane research network, is about to decide with whom to close a million-dollar natural gas deal. liquefied (LNG).

In the race are Azerbaijan's state oil company, SOCAR, and Gazprombank, owned by Russian state-owned natural gas provider Gazprom. Both companies are considering the offers. Shell, for its part, has confirmed that it will not submit a bid. So South Africa has to decide whether or not to do business with Gazprom despite the global geopolitical situation and the country's position on Ukraine.

But the weight of China and India is much greater than that of Brazil and South Africa. Just a few days ago, the Russian Foreign Minister, Sergei Lavrov, received the ambassadors of the BRICS countries. The meeting's message to Europe and the United States, according to the Russian reading, was: "Moscow is not alone."

Paris Beacon News

The views in the article are the author's own and do not necessarily reflect the editorial policy of InfoBRICS.

China
Source: www.frontiersin.org

Energy is considered the oxygen of an economy fueling all economic activities. Energy utilization and its type have an intertemporal and size-based effect on economic development. Therefore, this study empirically analyzes the relationship of fossil energy consumption with economic development in the case of BRICS countries between 1990 and 2019. Fully modified ordinary least squares is used with the quadratic function of coal, oil, and gas consumption to assess the size-based effect across time. This study shows that coal and natural gas consumption follows the inverted U-shaped relationship with HDI, while coal consumption shows a negative relationship with HDI. Hence, coal and gas energy assists in development when its share is small, while over-consumption hampers development. The BRICS countries should optimize coal and gas consumption with respect to economic development. Reducing fossil energy should be substituted with alternative clean energy resources by using advanced technology such as the gasification process.

Introduction

No one ignores the importance of energy consumption in this modern world because most economic activities depend upon energy consumption. Energy is considered the oxygen of an economy because, without energy, a country fails to run factories, houses, and all kinds of transportation in both developed and developing economies. All economic activities help produce goods and services, with an end goal of improvement in the living standard of humans (Kalim et al., 2021). So, energy consumption is an important indicator of economic development (Esen and Bayrak, 2017). By industrialization, production methods changed in the late 18th century, and it significantly increased the energy demand. Energy is the input that determines output production and is highly important for economic growth (Lee and Chang, 2008). Solow (1956) measured the economic growth by two basic inputs, labor and capital; later on, many economists added new inputs like human capital (Mankiw et al., 1992). There are numerous literature studies available in which economists added energy as an input along with labor and capital; previously, it was included in the land input (Kraft and Kraft 1978; Akarca and Long, 1980; Ramcharran, 1990; Tang and La, 1993; Asafu-Adjaye, 2000; Mehrara, 2007; Ahmad et al., 2016; Awodumi and Adewuyi, 2020; Kirikkaleli et al., 2021). Currently, fossil energy consumption is predominantly represented in overall energy consumption, especially in BRICS countries.

The present study is a multidimensional investigation of the effect of coal, oil, and gas consumption on economic development in the BRICS countries. Here, the link is developed using the energy Kuznets curve to explore the variation in the effects because of the size of energy consumption. BRICS countries are the most developed countries among the emerging economies, namely, India, Russia, China, South Africa, and Brazil. These countries' economic growth is increasing rapidly, causing the energy demand to increase. Several studies in BRICS countries have examined how fossil fuel energy consumption is the key determined by economic growth (Chang et al., 2017; Sasana and Ghozali, 2017; Wang et al., 2022). However, according to the researcher's knowledge, there is a dearth of studies that examined the effect of coal, oil, and gas consumption on economic development and whether there is any room to optimize energy consumption.

Economic development is the border than economic growth. UNDP defined "Development as a multidimensional phenomenon to achieve a higher standard of living of all people in the society. Social development, economic development and environmental protection are closely interlinked and mutually strengthen sustainable growth. Sustainable economic growth is compulsory for the social and economic development of all the country." To measure economic development, in 1990, renowned Pakistani economist Dr. Mahbub ul Haq, Special Adviser of UNDP, provided a new idea of economic development with the Human Development Index (HDI). This index analyzes people and their capabilities that assess the economic development of the country. HDI not only includes economic growth, but it also includes basic knowledge and standard of living. HDI is the geometric mean of three dimensions, namely, education, health, and economic growth. Figure 1 shows the flowchart of HDI.

Energy consumption affects the economic development of any country (Zahid et al., 2021). To fulfil the need for energy, usually, we get energy from two sources, renewable and non-renewable. Renewable energy sources are considered environmentally friendly, while on the other hand, non-renewable energy consists of fossil fuels that pollute the environment. But unfortunately, non-renewable fossil fuels are the big source of energy consumption in the BRICS (Ummalla and Goyari, 2020). In these countries, fossil fuel energy consumption increases economic growth, while renewable energy consumption has very little share in total energy consumption, so renewable energy consumption negatively impacts economic growth as it requires an initial investment in developing the infrastructure (Sasana and Ghozali, 2017; Zahid et al., 2021).

BRICS countries have a high proportion of coal, oil, and gas consumption because of high public demand. According to an ENERDATA report (2020), the BRICS countries' total coal consumption was reported to be 5,217 metric tons in 2019 compared to 1761 metric tons in 1990. Oil consumption was 1,138 metric tons in 2019 as compared to 641 metric tons in 1990, a growth of about 77.5%. Gas consumption was reported at 910 billion cubic meters in 2019 as compared to 506 billion cubic meters in 1990. Massive burning of fossil fuels has led to increased heat and greenhouse gases (EPA, 2021). These greenhouse gases badly impact the environment, having a very hazardous effect on the life of living things.

For the coal consumption of BRICS countries, China is the biggest coal consumer country that consumes 3,826 metric tons of coal, which is more than half of the total coal consumption of 5,217 metric tons. China is also the biggest country among the BRICS countries, which uses the highest oil consumption ratio. From the total oil consumption, 1,138 metric tons, China consumed 617 metric tons. This is more than half of the total oil consumption of BRICS. India comes in second, having used 224 metric tons of oil in 2019. In BRICS countries, China and India are considered the highest oil and coal consumers.

For the natural gas consumption in BRICS countries, Russia is the biggest natural gas-consuming country. It consumes 501 billion cubic meters, which is more than half of the total gas consumption of the remaining BRICS countries. In second place, China uses 304 billion cubic meters of natural gas.

According to the BRICS energy report (2020), fossil fuel energy consumption will remain dominant until the end of 2040. Details of the BRICS energy consumption are labeled in Figure 2 for 2018 and 2040. The above discussion concluded that BRICS countries are the major consumer of oil, coal, and gas but are still enjoying high growth. Studies like the one by Zahid et al. (2021) pointed out that fossil energy may harm the future, but it can provide higher growth today because of its low cost in production and transmission in the short run compared to renewable energy.

Figure 2 shows that in 2018 and 2040, coal will be the dominant portion of the energy consumption of BRICS. In 2018, coal's share was about half of the total energy consumption, which is 49%, while in 2040, it decreases slightly and reaches 36%. Another important source of energy consumption is oil consumption; in 2018, its consumption was 23%, while in 2040, it will be decreased slightly and reach 18%. While gas consumption had a lower share in BRICS energy consumption in 2018, 13%, in 2040, it will increase to 19%. These facts show that coal, gas, and oil are the major energy resources in the BRICS countries, while on the other hand, renewable energy sources have a minor share in total energy consumption.

BRICS countries cover about 43% of the population. These five countries have a special status all over the world. Table 1 shows the coal, gas, and oil energy consumption in BRICS and remaining consumption worldwide in 2018 and 2040.

Table 1 shows that BRICS are the major coal consumption player globally. The coal consumption of BRICS countries was 68% coal in 2018 and will be 72% in 2040, while the remaining world coal consumption was 32% in 2018 and will be 28% in 2040. At the same time, oil consumption in BRICS was 27% in 2018, while it will decrease by only 6% in 2040. In BRICS, natural gas consumption has a lowered share in energy consumption; in 2018, it was 22%, while in 2040, it will increase the natural gas share by 7%.

All the earlier discussion concluded that oil, gas, and coal are energies majorly consumed by the BRICS countries. This high fossil fuel energy consumption causes carbon emissions in these countries. According to EIA (2020), consumption of one Btu (British thermal units) of different coals increases carbon emissions by an average of 216 pounds. One Btu of oil consumption increases carbon emission by 161.3 pounds. In the same way, one Btu of natural gas consumption increases carbon emission by 117 pounds. These facts show that coal and oil consumption causes a lot of carbon emissions, which may have a significant effect on environmental quality (Salem et al., 2021).

Figure 3 shows the top 20 carbon emission countries in the world in 2019. China is the biggest carbon emission country with 28% of carbon emissions of total carbon emissions. The second biggest country is the United States, which consumes 15%, about less than half of China. India is the third largest carbon emission country and emits about 7% carbon. The fourth largest carbon emission country is the Russian Federation, and it emits 5% carbon. It is clear that three of the top four carbon emission countries are members of the BRICS countries. All BRICS countries are included in the top 20 countries.

If such high carbon emissions are documented because of fossil energy, a country may grow positively today, but it will badly affect the natural resource availability. So, sustainable development for a country may not be possible if the natural resources and environment are depleting. Zahid et al. (2021) pointed out that the country may face a tradeoff in shifting from fossil energy to renewable energy because of the cost of developing clean energy infrastructure. So, null hypothesis one is assumed, that is, coal, oil, and gas consumption does not affect economic development, while null hypothesis two is that coal, oil, and gas consumption's positive effect will not diminish with the increase in the proportion of this fossil energy consumption.

This study aimed to examine the incidence-based impact of different subtypes of fossil fuel (coal, oil, and gas) energy consumption on economic development for the case of BRICS countries. The idea is to explore if quadratic optimization of energy can increase development via the reduction of CO2 emissions and assess the historical patterns using the decoupling method.

This study will be instrumental in the following domains:

1) Answering the question of why BRICS countries are still growing if they are high consumers of fossil energy and why developing countries like BRICS show a fast transition to clean energy.

2) Estimating the transition process by increasing the development potential from the existing fossil energy portfolio.

3) Checking if there is a need to revisit the current plan to greenify the development-targeted energy portfolio.

This study comprises the previous literature review in Literature Review, methodology and data in Methods and Material, and results and discussion in Empirical results and Discussions and Policy Recommendations, and conclusion and policy recommendation are enlisted.

Literature Review

The present literature studies the link between subtypes of fossil fuel energy consumption such as coal, oil, and gas consumption and economic development.

Natural Gas Consumption and Development

Natural gas is a subtype of fossil fuel energy. There are few listed studies which show the positive relationship of NGC with economic growth. Hassan et al. (2017) demonstrated the impact of NGC on economic growth in Pakistan from 1977 to 2013. The Johansen maximum likelihood econometric approach concluded that NGC positively affected the economic growth of Pakistan in the long run. Shahbaz et al. (2013) also studied the impact of NGC on the economic growth of Pakistan. The ARDL model was applied and it was concluded that NGC, labor, capital, and export of goods and services positively affected Pakistan's economic growth. Das et al. (2013) examined the impact of NGC on the GDP of Bangladesh during 1980–2010 and showed positive causation between NGC and GDP. In Iran, Balsalobre-Lorente et al. (2019) investigated the positive associations between NGC and output growth during the 1990–2017 data set.

Few studies showed the inverse relationship between NGC and economic growth in the literature on the impact of NGC on economic growth. Fatai et al. (2004) compared energy conservation policies of the New Zealand economy with that of seven Asian economies and Australia. This study failed to examine the causal association between NGC and GDP in the case of New Zealand and Australia compared with other Asian economies by applying the ARDL approach. In Pakistan, Siddiqui (2004) conducted a study and found an inverse relationship between NGC and economic growth. Aqeel and Butt (2001) also evaluated that oil consumption leads to economic growth while NGC leads to an inverse relationship with economic growth. Isik (2010) explored the impact of NGC on GDP in the Turkish economy during 1977–2008. The ARDL bound test approach concluded that NGC negatively impacted the GDP in the long run while positively impacting it in the short run.

The impact of NGC on economic growth relationship panel countries was also carried out. Ucan et al. (2014) studied the 15 EU countries during 1990–2011. The heterogeneous cointegration test proposed that NGC had had a positive association with economic growth. Ozturk and Al-Mulali (2015) conducted the study in Gulf Cooperation Council countries; Destek (2016) conducted a study in 26 OECD countries. In both of these studies, they applied panel cointegration test, panel dynamic, and fully modified OLS approach and concluded that NGC positively affected the economic growth. Zhi-Guo et al. (2018) studied the Northeast Asia countries' (Korea, Japan, and China) NGC and economic growth during 1991–2015. In these counties, NGC affected economic growth positively. Balitskiy et al. (2016) separately proposed two models of the impact of NGC on economic growth and development in 26 EU countries during 1997–2011. The study concluded that NGC positively impacts economic growth while having an inverse relationship with economic development. Alam et al. (2016) investigated the NGS on GDP growth in the panel of 15 natural gas-consuming developing countries. The long run result suggested that among 15 countries, nine countries positively impacted NGC on GDP while only five countries have negatively impacted the NGC and GDP while trade variable positively impacted the GDP. Apergis and Payne (2010a) studied the panel of 67 countries during 1992–2005. The study showed that in the long run, NGC, gross fixed capital formation, and labor force leads to GDP.

Oil Energy Consumption and Development

Oil energy consumption (OIL) impacts sustainable development. Few studies are discussed in this portion. Adekoya (2021) linked the oil consumption with economic growth with natural resources of 10 resource-rich countries and six resource-poor countries from 1990 to 2017. THE panel ARDL model found that in resource-rich countries, oil negatively responds in the long run, while in resource-poor countries, it failed to judge any positive or negative association with economic growth. Waleed et al. (2018) in Pakistan and Rahman et al. (2018) in Bangladesh attempted to examine the effect of oil on economic growth and found that oil directly affected economic growth. In China, Zou and Chau (2006) also found that oil caused economic growth in the long run from 1978 to 2000.

In the Latin American region, Behmiri and Manso (2014) divided the whole region into three panels: Caribbean countries, Central American countries, and South American countries. In the panel of Caribbean and South American countries, oil negatively impacted economic growth, while in case of the Central American panel, oil positively impacted economic growth.

Coal Energy Consumption and Development

Coal energy consumption positively impacts economic development. Xu et al. (2018) studied the impact of coal energy consumption (COL) on sustainable development in China. Romer's growth drag theory applied by using the Johansen cointegration test concluded that coal enhanced China's economic development. In Turkey, Aktas (2018) found long-run cointegration between coal and GDP growth during 1970–2014. The Granger causality test supported the bidirectional causality between coal and GDP.

Few studies examined the way coal negatively impacted economic growth. One study was conducted in the 25 OECD countries. Apergis and Payne (2010a) showed that coal consumption negatively affected economic growth in the short run and long run. In the same way, Irwandi (2018) carried out their findings in Indonesia and found no causal relationship between coal and economic growth. In BRICS countries, Chang et al. (2017) suggested that CEC and economic growth were not sensitive to each other. Meanwhile, in the case of individual countries, coal caused economic growth in China and negatively impacted economic growth in South Africa. In the case of India, there existed a bidirectional relationship.

Nguyen-Van (2010) proposed the energy consumption Kuznets curve with income per capita for the group of panel data. The study concluded that energy consumption also increased with the increase in income.

By increasing coal consumption, air and water pollution has affected residential societies badly. Burning oil produces NO2 (nitrogen dioxides), SO2 (sulfur dioxides), and various heavy metals, which ultimately affect human health (Hendryx et al., 2020; Finkelman et al., 2021; Guo et al., 2021).

Fossil Energy Consumption and Development

Few studies examined the relationship of all subtypes of fossil fuel energy consumption and economic growth. Ahmed and Shimada (2019) studied the impact of renewable energy consumption and fossil fuel energy consumption on economic suitability in all world countries. The study found that due to the increase in the amount of renewable energy consumption, economic growth increased in South Asian and most of the African countries; on the other hand, non-renewable energy consumption enhanced economic growth in Caribbean countries.

In G-7 countries, Destek and Okumus (2017) investigated the impact of oil, coal, and natural gas consumption on economic growth during 1970–2013. It concluded that oil consumption caused economic growth in the United States, the United Kingdom, Japan, and Italy.

Siddique et al. (2016) used the subtypes of fossil fuel energy consumption, and studied the impact of gas, oil, and coal and electricity energy consumption on economic growth during 1982–2015 in Pakistan. It concluded that all subtypes significantly impact economic growth. Faridi and Murtaza (2013) analyzed that oil, gas, and electricity consumptions are the key factors to enhance GDP growth and agriculture sector output of Pakistan during 1972–2011. The ARDL model approach suggested that coal, gas, and electricity are important determinates of GDP growth.

Steinberger and Roberts (2009) investigated the simulation-based association between energy use and HDI and found that energy use had positively affected the HDI. Asghar et al. (2020) investigated the impact of coal, oil, and gas consumption on the human development index in Pakistan. The study concluded that due to coal, oil, and gas consumption, air pollution, TB cases, measles, and the mortality rate have increased, which affected the HDI. In the SAARC region, Zahid et al. (2021) proposed the topic of the impact of quadratic energy consumption on the human development index from 1990 to 2017. The GLS method concluded that energy consumption shows the inverted U-shaped association with HDI.

For sustainable development, health indicators also played a significant role. Oil, gas, and coal consumption adversely affects the health indicators. Due to the increase in fossil fuels, carbon emissions increase, which causes different kinds of diseases such as tuberculosis, which increase the mortality rate (Hanif, 2018).

Sectorial Consumption of Coal, Oil, and Gas

Coal, oil, and gas are not substituted for each other. These energy sources are used in different projects. Coal is considered the major portion of energy consumption worldwide. A bulk portion of coal is consumed for power production, industry, and domestic use. According to IEA (2019), about 38% of electricity is produced through coal. Many private industries have developed their own power plants to generate electricity by using coal (Ghafoor and Weiss, 1999). Paper industries burn coal to produce heat, and steel industries use coal coke in furnaces. It also uses coal coke to smelt ore iron into pure iron and then make steel (Carpenter, 2012). Coal is also used in cement industries because cement is made from a mixture of silica, carbonate, alumina, and iron oxide, which requires a high temperature that is achieved by burning coal (Osborne and Gupta, 2013). On the other hand, coal has a minor share in transportation and residential purposes as coal-based steam engines are not used in railways.

Oil consumption is used in transportation and in electricity generation at the residential level. According to IEA (2018a), about 49.3 percent of oil is consumed for road and air transportation. All kinds of vehicles run by oil consumption.

Gas is an important fossil fuel because it has special importance worldwide as it produces low carbon emissions. According to IEA (2018b), about 37% gas is consumed in industries. Most industries consume gas for heating purposes in power systems and combined heat and as raw material to produce hydrogen, chemicals, and fertilizers (Solarte-Toro et al., 2018). The residential sector also consumed a lot of gas to heat the buildings and water, dry clothes, and cook food. Worldwide, it consumed about 30% in the residential sector (IEA, 2018c).

Exports of Goods and Services on Development

While discussing the impact of exports of goods and services on economic development, it can be observed that the export of goods and services plays a significant role in economic development. More than 200 years ago, all economists and philosophers agreed that free trade begets better living standards by improving health, education, and income. Exports directly affect the income and indirectly affect non-income factors. Numerous previous literatures show that exports positively affected economic development (Feder, 1983; Fosu, 1990; Anwer and Sampath, 2000; Davies and Quinlivan, 2006). In the case of BRICS countries, Rani and Kumar (2018) empirically evaluated that a one percent increase in export will increase 0.44 percent of GDP per capita in the long run.

Labor Force Participation and Development

In the classical Solow model, labor is an important component of economic growth. BRICS countries' population is about 43% of the total population. Due to this massive total population, there is a big share of labor force participation. Numerous previous literatures showed the positive relationship of labor force participation to economic growth (Paudel and Perera, 2009; Lahoti and Swaminathan, 2013; Amir et al., 2015).

Several studies have been mentioned in the literature review that had tried to connect fossil fuel use with development via growth or CO2 emissions channel. But very few studies have explored the nonlinear effect of fossil energy components in the panel data on development to assess the intertemporal and size-based effect. This study has estimated the quadratic fit for fossil energy components against HDI, which provides the incidence/size-based effect of energy consumption for each country. It helps in planning country-specific strategies to increase HDI by optimizing the portfolio of fossil energy demand.

Methods and Material

Sample of the Study

The sample of this study is selected from the BRICS countries, namely, India, China, South Africa, Brazil, and Russia. Thirty years of data sets during 1992–2018 were collected from various sources (Table 2). The main purpose of selecting the BRICS countries is that they have high energy consumption due to their fast economic growth and development (Camioto et al., 2016). BRICS countries' coal, oil, and gas consumption is playing a significant role in industrialization and sustainable economic development (BRICS energy report, 2020).

Data and Variables

To estimate Eq. 1, Table 2 demonstrates the description of the variables. The data of five BRICS countries are collected from 1992 to 2018. The human development index (HDI) has been used as the dependent variable in this study, including three variables: per capita income, life expectancy, and literacy rate (HDR, 2020).

This study focuses on the impact of the subtypes of three forms of non-renewable energy consumption, namely, oil consumption (OIL), natural gas consumption (NGC), and coal consumption (COL), on economic development. Due to the enhancement of energy resources, export of goods and services (EXPO) and labor force (LFTOT) also impact economic development. Table 2 presents all variables used in this study. All variables except HDI are transformed into the natural logarithm to facilitate elasticity base comparison.

Econometric Model

This study will start with assessing the empirical movement of data using the decoupling method proposed by Tapio (2005). This method constitutes an index DI, a ratio of % change in HDI to a % change in fossil energy consumption. According to the literature, the decoupling will be favorable for the country if DI < 0, and it is best when, along with DI < 0, the independent variable (fossil energy)'s % change is negative (Dahmani et al., 2021).

To build the theoretical econometrics model, Environmental Kuznets Curve (EKC) suggested that economic growth (GDP) initially degrades the environment, but after maturity, it improves the environment quality and shows the U-shaped relationship. Sometimes EKC suggested that GDP initially increased the environmental quality, but after maturity, it degrades the environmental quality and shows the inverted U-shaped hypothesis (Apergis and Ozturk, 2015; Sarkodie and Strezov, 2019; Dogan and Inglesi-Lotz, 2020; Sarkodie and Ozturk, 2020; Ahmad et al., 2021; Chu, 2021; Murshed et al., 2021).

Inspired by this model, we built the energy human development index Kuznets curve in this study. This means that, initially, an increase in fossil fuel energy consumption produces lower carbon emissions and footprint. In this stage, utilization of fossil energy is actually increasing the productivity of other inputs, leading to improvement in income, health, and education (Haines and Dora, 2012; Koo et al., 2014; Lee et al., 2017; Fankhauser and Jotzo, 2018; Hudha et al., 2020; Patz et al., 2020). Later on, the use of fossil fuel energy consumption will increase carbon emissions and footprint. Due to high carbon emissions, it will deteriorate environmental quality, health, and productivity; thus, economic development deteriorates (Versteijlen et al., 2017; Salman et al., 2019; Wang et al., 2019).

Figure 4 presents the theoretical model of this study. To assess energy utilization, this study has used the square terms of the subtypes of fossil fuels. A similar methodology was adopted by Hanif et al. (2019a, b) and Arshed et al. (2018, 2019). The estimation model is as follows:

where HDI, Human Development Index; LNCOL, Natural Logarithm of Coal Consumption percentage of total energy consumption; LNCOL2, Square of LNCOL; LNOIL, Natural Logarithm of Oil Consumption percentage of total energy consumption; LNOIL2, Square of LNOIL; LNNGC, Natural Logarithm Natural Gas Consumption percentage of total energy consumption; LNNGC2, Square of LNNGC; LNEXP, Natural Logarithm of Export of goods and services; LNLFTOT, Natural Logarithm of total labor.

The key advantage of applying the square form is that it indicates a deviation from the constant return to the scale assumption, under which the variable explains the marginal effect (Hayes, 2017). Furthermore, the square form helps determine the cut-off value of the variable from where the effects change direction (Arshed et al., 2018, 2019). The following equation is used to determine the cut-off value of natural gas, oil, and coal consumption with respect to HDI.

Eqs 2–4 demonstrated the minimum value of the U-shaped function or the maximum value of the inverted U-shaped function of the quadratic functions (Chiang and Wainwright, 2005).

Estimation Technique

Since the data vary across cross sections and time periods are more than 20 for each time period (Arshed et al., 2018), this study has opted for the dynamic panel data model. Under this premise, the variables are tested for LLC and IPS panel unit root tests, and further KAO panel cointegration is applied if any one of the variables is non-stationary. This study has used the fully modified least squares (FMOLS) model (Iqbal et al., 2021).

Empirical Results

Table 3 provides the descriptive statistics of dependent variable HDI and all concerned independent variables such as COL, OIL, NGC, EXPO, and LFTOT. The mean value is higher than the standard deviation for all the variables, confirming that they are under dispersed. This denotes that for the selected sample, the data are scattered homogenously around a common mean. Jarque Bera normality tests are significant at the 5% level. Kurtosis values show outliers, which makes an inference from the ordinary least square model redundant (Zahid et al., 2021). This study uses the central limit theorem to assume that the variables are asymptotically normal.

Figure 5 visualizes the correlation between energy consumption indices, export of goods and services, labor force participation, and human development index. It is observed that LNLFTOT is most correlated with LNCOL compared to other energy consumption indicators.

Figures 6–8 show that the increase in the subtype of fossil energy consumption has a nonlinear association with the human development index (HDI). The nonlinear association depicts that the proportion of each energy consumption does play a role in determining how fossil energy consumption affects human development. Further ignoring the quadratic effects in estimation may lead to missing specification bias.

Table 4 provides the DI index values which compare the HDI change with each fossil energy type. Here, the bolded numbers are the cases where DI is negative, while the starred items are the cases where the % change in fossil energy is also negative. The case where bold and star coincide shows the ideal decoupling case. The results showed that in recent years, there is ideal decoupling for all countries except for the case of gas consumption in China.


Table 5 provides the results of LLC and IPS panel unit root tests. Here, we can see that variables like HDI, LNCOL, LNCOL, LNOIL, and LNNGC are non-stationary at level, while LNEXPO and LFTOT are stationary at level. This confirms that the data are intertemporal and static panel data models may provide spurious results. Furthermore, the KAO panel cointegration test statistic is -3.35 with a probability of 0.00, which confirms that the selected variables are cointegrated in the long run.

Table 6 labels the detailed results of FMOLS estimates. It used 130 observations of five BRICS countries across time. The R square suggests that the selected variables are explaining 86% variation in the HDI.

The level coefficient of coal consumption is positive and significant while the square of coal consumption is negative and significant, which proposed the inverted U-shaped relationship between LNCOL and HDI. In case of economic development, at lower coal consumption level, 1 percent increase in coal consumption will increase economic development by 0.21 percent (similar finding by Xu et al., 2018; Aktas, 2018). This positive effect is not constant; this effect diminishes with the size of coal energy, such that 1 percent increase in the coal consumption decreases economic development by 0.07 percent (similar findings by Finkelman et al., 2021; Guo et al., 2021; Hendryx et al., 2020; Irwandi, 2018; Chang et al., 2017; Apergis and Payne, 2010b). So, this study rejected the proposition of constant returns to scale used by past studies.

The level form coefficient of oil consumption (OIL) is negative and statistically significant, while the squared form coefficient is positive but statistically insignificant. This relationship is negatively linear between LNOIL and HDI. A 1 percent increase in oil consumption will lead to a 0.32 percent decrease in HDI (similar results by Adekoya, 2021; Camioto et al., 2016; Behmiri and Manso, 2014). Here, this study accepts the hypothesis of constant negative returns to scale between LNOIL and HDI.

The level form coefficient of natural gas consumption (LNNGC) is positive and statistically significant, while the squared form coefficient is negative and statistically significant. This demonstrates the inverted U-shaped relationship between them. Hence, natural gas consumption, initially at a lower share of the consumption phase, plays a positive role in the economic development of BRICS countries (similar finding by Balsalobre-Lorente et al., 2019; Zhi-Guo et al., 2018; Hassan et al., 2017; Ozturk and Al-Mulali, 2015; Shahbaz et al., 2013; Das et al., 2013). Beyond a certain limit of consumption share, further increase in natural gas consumption may obstruct economic development (similar findings by Isik, 2010; Fatai et al., 2004; Siddiqui, 2004; Aqeel and Butt, 2001). So the hypothesis of constant returns to scale is rejected by this study.

For the case of control variables, export of goods and services (LNEXPO) significantly affects the economic development in BRICS countries. A 1 percent increase in exports will lead to a decrease in the human development index by 0.02 percent. This can be reasoned by the fact that the major source of production of export commodities is fossil fuels. Labor force participation also influences human development index in BRICS countries. A 1 percent increase in the LFTOT increases human development by 0.49 percent. These results are similar to the outcome of other studies (Paudel and Perera, 2009; Lahoti and Swaminathan, 2013; Amir et al., 2015). Referring to Table 7, the thresholds are estimated. According to this, beyond 10.17% of coal energy consumption and 2.72% of gas energy consumption with respect to total energy consumption, country will experience development depreciating effect of fossil energy. Hence, countries should limit coal energy consumption to 2.32% and gas to 2.72%.

This study has visualized the quadratic effects using the method from the study by Dawson (2014), whereby the size of the quadratic variable is on the x axis and its marginal effect is on the y axis. Figures 9–11 show the estimated effects of fossil energy; it is evident here that coal energy and gas energy are depicting an inverted U shape, while oil energy is showing a negative effect.

Discussions and Policy Recommendations

The inverted U-shaped curve of coal and gas consumption suggests that an initial increase in coal and gas consumption enhances economic development. At the same time, after a certain limit, further increase in coal and gas consumption negatively impacts the economic development in BRICS countries. On the other hand, oil consumption and the HDI curve are negative. It means each unit of additional coal consumption will cause a decrease in economic development. So, we can say that coal and gas consumption has diminishing marginal returns when studying against development. It can easily be concluded that subtypes of fossil fuels such as coal, oil, and gas consumption negatively impact the economic development in BRICS countries. This study contradicts previous studies conducted in the BRICS countries that determined that fossil fuel consumption is an engine of economic growth (Chang et al., 2017; Sasana and Ghozali, 2017). Fossil fuel may increase economic growth while it is inversely related to economic development. The massive consumption of fossil fuels increases greenhouse gas emissions, directly affecting the global environment and natural resources. Environmental degradation creates global warming and many diseases in humans. According to the United Nations sustainable development goals, no country can develop with the consumption of high fossil fuels. At the same time, the BRICS energy (2020) report projected that the BRICS countries would continue to consume fossil fuels till 2040 at almost the same speed. Coal and oil consumption causes a lot of carbon emissions. Unfortunately, two of the BRICS member countries, China and India, are the biggest users of coal and oil worldwide. Both of these countries consume about more than half of the world coal consumption. It is a very alarming situation for all over the world. It will severely affect climate change and cause global warming. A big challenge of the United Nations Environment Programme (UNEP) is to save this planet from