An Econometric Analysis of Economic Development and CO2 Emissions in India

Abstract

Purpose: The purpose of this article is to investigate the impact of economic development on the environment. Using time series data from 1991 to 2019, GDP per capita and CO2 emissions are utilised as indicators of economic development and environmental degradation, respectively. Design/Methodology/Approach: PP and ADF unit root tests verify variable stationarity. Econometric study using Johansen cointegration test and vector error correction model (VECM) and residual stability model. Findings: Study revealed that long-run association among Carbon dioxide emissions, gross domestic product per capita, and industrial Value added. Carbon dioxide emissions increased with the rised in the Gross domestic product per capita. GDP per capita was outcomes to be unfavorably related to Carbon dioxide emissions in India. Research Limitations/Implications: This study was suggest that environmental degradation can be reduced at the cost of economic development. Energy-efficient technologies should be encouraged to enhance the domestic product with the help of the industrial sector by improving environmentally friendly technologies from advanced economies. This study suggests the need for environmental policies to reduce emissions during periods of economic growth. Originality/Value: This paper used new econometric methods to study the relationship between economic development and environmental degradation in India year 1991 to 2019.