Do renewable energy consumption and service industry development contribute to CO2 emissions reduction in BRICS countries?

In recent years, BRICS countries have attached great importance to renewable energy development and actively promoted the shift of economic structure towards service industry, in order to achieve the decoupling of economic development from carbon emissions. However, relevant studies mostly neglect the cross-sectional dependence and heterogeneity issues, which may cause biased results. Therefore, this paper selects the panel data of BRICS countries during 1996–2017 and employs the common correlated effects mean group (CCEMG) method, which are based on the cross-sectional dependence and heterogeneity assumptions, to explore the influence of renewable energy consumption and service industry development on CO2 emissions in BRICS countries. Besides, we also use the random effects model and pooled estimated generalized least squares model, as well as fully modified OLS model for comparison. The results indicate that enhancing the proportion of renewable energy consumption in the total energy consumption is an effective measure to reduce CO2 emissions in BRICS countries. Moreover, the steadily rising contribution of service industry to economic growth in BRICS countries during the sample period does not necessarily contribute to reduce CO2 emissions.