Analysis of the Existence of Environmental Kuznets Curve: Evidence from India

Abstract

The study aims to estimate the Environmental Kuznets Curve (EKC) in the Indian context for the period of 1991-2018 by considering the role of economic growth, renewable energy, foreign direct investment, stock market size, energy intensity, and private investment in the energy sector with the help of autoregressive distributed lag (ARDL) cointegration technique. The results confirm the existence of an inverted U-shaped EKC relationship between economic growth and CO2 emission level. However, the estimation of turnaround point shows that CO2 levels have kept increasing past the turnaround point, indicating that income disparity is a decisive factor in determining emissions and is a better indicator than national income. Furthermore, results confirm the negative impact of economic growth and stock market size on the environment. In contrast, renewable energy, foreign direct investment, and energy intensity positively impact the environment in the long run. However, the impact of private investment is insignificant. Though the Indian economy continued to grow during the last few decades, the minimal investment towards renewable energy may not help to reduce the environmental problems. Hence, the nation's income growth alone does not solve the ecological issues in the long run. In addition, it requires an increase in private investment towards the development of India's renewable energy sector.

Does Renewable Energy Consumption Mitigate Carbon Emissions for India?

“…Zambrano-Monserrate et al (2018) empirically evaluated the existence of inverted U-shaped EKC for Singapore. Tiwari (2011), Sinha and Shahbaz (2018), Behera (2021), Villanthenkodath et al (2021), Gopakumar, Jaiswal, and Parashar (2022) validated the presence of EKC for India.…”

“…As per Paris accord on climate change, India has pledged to secure 60 GWh energy via wind by the year end of 2030 (Indian Wind Energy Association 2022). Hydro Energy As per International Hydropower Association (2022), India has the fifth largest hydro power generation capacity in the world. Hydro power refers to energy generated via generators that are driven by turbine in order to convert potential energy of falling water into mechanical energy.…”

“…As per International Hydropower Association (2022), India has the fifth largest hydro power generation capacity in the world. Hydro power refers to energy generated via generators that are driven by turbine in order to convert potential energy of falling water into mechanical energy.…”

Achievement of both Growth and Environmental Conservation by Digital Platform Providers

“…The academic discussions on the EKC hypothesis have started in the 1990s by Grossman and Krueger (1991) and World Bank (1992), then, the discussions have extended from air pollutions to water contaminations and deforestation. (Aruga 2019;Benoit et al 2022;Csereklyei et al 2017;Galeotti et al 2009;Gopakumar 2022;Selden et al 1999;Sorgea et al 2020;Tsujimoto 2018 and. Especially, in the hypothesis, environmental impacts increase up to a certain level of economic growth and then start to decrease, showing an inverted U-shaped curve at the turning point.…”

Nexus between foreign direct investment and ecological footprint in BRICS and Next-11: the moderating role of green innovation

“…According to prior research, many economic variables affect environmental degradation, including foreign direct investment, international tourism, energy consumption, imports and exports, technological innovation, financial development, industrialisation, urbanisation, human capital, economic growth and trade openness (Rudolph and Figge, 2017;Ayobamiji and Kalmaz, 2020;Adebayo et al, 2020;Yasin et al, 2020;Aller et al, 2021;Zeraibi et al, 2021;Ahmed et al, 2022b;Ali et al, 2022;Burki and Tahir, 2022;Chaudhry et al, 2022;Gopakumar et al, 2022;Sahoo and Sethi, 2022;Shah et al, 2022). One of the most critical indicators of environmental degradation is the inflow of foreign direct investment (FDI), which is essential to accelerate the economic liberalisation and openness of various economies (Nasir et al, 2019;Neves et al, 2020).…”