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Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

Author

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  • Muhammed Ashiq Villanthenkodath

    (Indian Institute of Technology Kharagpur)

  • Mohini Gupta

    (Jaypee Institute of Information Technology)

  • Seema Saini

    (Indian Institute of Technology Kanpur)

  • Malayaranjan Sahoo

    (National Institute of Technology (NIT) Rourkela)

Abstract

This study aims to evaluate the impact of economic structure on the Environmental Kuznets Curve (EKC) in India. The present study deviates from the bulk of study in the literature with the incorporation of both aggregated and disaggregated measures of economic development on the environmental degradation function. For the empirical analysis, the study employed the Auto-Regressive Distributed Lag (ARDL) bounds testing approach of cointegration to analyse the long-run and short-run relationship during 1971–2014. Further, the direction of the causality is investigated through the Wald test approach. The results revealed that the conventional EKC hypothesis does not hold in India in both aggregated and disaggregated models since economic growth and its component have a U-shaped impact on the environmental quality in India. However, the effect of population on environmental quality is positive but not significant in the aggregated model. Whereas, in the disaggregated model, it is significantly affecting environmental quality. Hence, it is possible to infer that the population of the country increases, the demand for energy consumption increase tremendously, particularly consumption of fossil fuel like coal, oil, and natural gas, and is also evident from the energy structure coefficient from both models. This increase is due to the scarcity of renewable energy for meeting the needs of people. On the contrary, urbanization reduces environmental degradation, which may be due to improved living conditions in terms of efficient infrastructure and energy efficiency in the urban area leading to a negative relation between urbanization and environmental degradation.

Suggested Citation

  • Muhammed Ashiq Villanthenkodath & Mohini Gupta & Seema Saini & Malayaranjan Sahoo, 2021. "Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-17, December.
    • Handle: RePEc:spr:jecstr:v:10:y:2021:i:1:d:10.1186_s40008-021-00259-z
    DOI: 10.1186/s40008-021-00259-z
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    2. Hussain, Moon Moon & Pal, Shreya & Villanthenkodath, Muhammed Ashiq, 2023. "Towards sustainable development: The impact of transport infrastructure expenditure on the ecological footprint in India," Innovation and Green Development, Elsevier, vol. 2(2).
    3. Ar'anzazu de Juan & Pilar Poncela & Vladimir Rodr'iguez-Caballero & Esther Ruiz, 2022. "Economic activity and climate change," Papers 2206.03187, arXiv.org, revised Jun 2022.
    4. Farooq, Umar & Dar, Arif Billah, 2022. "Is there a Kuznets curve for forest product footprint? – empirical evidence from India," Forest Policy and Economics, Elsevier, vol. 144(C).
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    6. Hossain, Mohammad Razib & Rej, Soumen & Awan, Ashar & Bandyopadhyay, Arunava & Islam, Md Sayemul & Das, Narasingha & Hossain, Md Emran, 2023. "Natural resource dependency and environmental sustainability under N-shaped EKC: The curious case of India," Resources Policy, Elsevier, vol. 80(C).
    7. Rana Muhammad Adeel-Farooq & Jimoh Olajide Raji & Ghulam Muhmmad Qamri, 2023. "Does financial development influence the overall natural environment? An environmental performance index (EPI) based insight from the ASEAN countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5123-5139, June.
    8. Yu, Xiaohong & Xu, Haiyan & Lou, Wengao & Xu, Xun & Shi, Victor, 2023. "Examining energy eco-efficiency in China's logistics industry," International Journal of Production Economics, Elsevier, vol. 258(C).

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    Keywords

    CO2; Economic structure; EKC; India; Energy structure;
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