Researchers from Near East University have co-authored an important study examining the impact of insurance markets, renewable energy, and climate change on biodiversity within BRICS countries. The study, which covers the period from 1990 to 2018, provides significant insights into environmental sustainability practices and their relationship with economic factors.
Utilizing the non-linear autoregressive distributed lag (NARDL) method, the research revealed that positive changes in insurance markets can negatively affect biodiversity, whereas negative changes in these markets can have beneficial effects. This indicates a complex relationship between financial sectors and ecological sustainability. Furthermore, the study demonstrated that while economic growth can exacerbate biodiversity loss, renewable energy has a positive influence on biodiversity levels.
The findings emphasize the importance of reorienting economic growth towards sustainable or green growth to combat climate change-related biodiversity loss. This aligns with the global pursuit of affordable and clean energy, urgent action to combat climate change and its impacts, and the protection, restoration, and promotion of sustainable use of terrestrial ecosystems. The study suggests that BRICS nations should develop sustainable strategies to decrease reliance on non-clean energy sources, advocating for policies that encourage investment in green energy.
Moreover, the research indicates that tackling climate change is crucial for preserving biodiversity. Policymakers are encouraged to accelerate initiatives for greening the financial system, reinforcing national strategies for ecosystem conservation and carbon stock restoration. This would contribute significantly to mitigating ecosystem degradation and climate change.
The study also underscores the influential role of the insurance sector in environmental sustainability. It proposes integrating the insurance market into climate-related financial risk frameworks, adopting a holistic risk-based approach to assess the impact of financial institutions on biodiversity. This approach would include higher premiums for non-environmentally friendly activities and incentives for sustainable practices. Insurance companies are also encouraged to review their investment portfolios towards more environmentally friendly activities, incorporating environmental, social, and governance (ESG) considerations.
In conclusion, this research led by Near East University researchers offers valuable policy implications for BRICS countries to balance economic development with environmental sustainability. It highlights the need for integrated approaches combining economic, environmental, and financial strategies to achieve sustainable development and biodiversity conservation.
For further details, access the original paper from the publisher’s link:
https://link.springer.com/article/10.1007/s11356-022-24068-4
