Validation of the environmental Kuznets curve and role of economic globalization: an aggregate and sectoral analysis of an Indian economy

This research investigates the validation of the environment Kuznets curve (EKC) at aggregate and sectoral levels for the Indian economy both. The study covers the period 1970–2020. The stationarity of the variables was also confirmed by some traditional unit root tests, and structural breaks were also determined by the Zivot-Andrews test. The autoregression distributive lag model (ARDL) bound test is deployed to observe the cointegration between variables with different structural breaks. Additionally, we investigate short-run, long-run, and combined causal relations among the variables by employing the vector error correction model (VECM) test. The results validate the presence of EKC not only at the aggregate level but also at the sectoral level. Moreover, energy consumption increases CO₂ emissions, while economic globalization reduces CO₂ emissions. The findings reveal that economic globalization is beneficial to environmental quality, while energy consumption hampers it in India. As a result of these findings, policymakers in India should include economic globalization as an essential element in the carbon emissions function while designing an enhanced economic policy framework that leads to low carbon-driven, sustainable, and inclusive economic growth at the aggregate and disaggregated levels.