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ABSTRACT

This paper found long-run cointegration among carbon dioxide (CO2) emission, economic growth, energy, trade openness, and financial development for India throughout 1971-2015 by employing autoregressive distributed lag (ARDL) bound test. The empirical results reveal that all the variables are positive and statistically significant, where electricity generated from coal and per capita real GDP has a more considerable impact while trade openness and financial development have the most negligible impact on Environmental quality—other determining variables suggesting the use of the environmental friendly source of electricity generation. Through alternative energy sources, for example, renewable energy, clean fuel, green and low carbon emission technology, pollution in the atmosphere can be reduced. Our contribution to the Indian literature through revalidating an inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis between India’s economic growth and carbon emission.

Keywords: Carbon Dioxide (CO2), energy use, economic growth, trade openness, financial development, ARDL