Validity of EKC for CO2 in India during 1960 to 2020: an ARDL-cointegration approach

The aim of this paper is to examine how CO2 emission in India responds to the growth of per capita GDP (economic growth), changing share of manufacturing and international trade to GDP since 1960. This is to understand if a EKC type temporal relationship exists and to find out if the continuous growth is in favour of environmental sustainability. The graphical exposition is checked to have a cursory look at possible functional relation. Then subperiod regressions and ARDL approach to Cointegration method are employed to examine the short- and long-run quadratic relationships of the time series data between the emission of CO2 and per capita GDP. The results suggest that a long-run relation exists among CO2 emission, economic growth, manufacturing output and export as a percentage of GDP. The existence of an EKC in India is, however, associated with short run insignificant relation of CO2 emissions with manufacturing output and export as proportion to GDP. The policy outcome of this long-run EKC relationship in India, is that economic growth itself is the ultimate means to environmental improvement in the long run. It is because of increasingly environment friendly policy measures in various anthropogenic activities in the country undertaken in India. As a matter of policy, the positive relation of manufacturing share of GDP with CO2 emissions, despite low absolute share of it to GDP warrants for putting efforts on growth of manufacturing (for continued growth), but with serious efforts on environmental management and control of emission standard as well as overall pollution.