Nexus of Economic Growth and Environmental Degradation in India Environmental Kuznets Curve (EKC) Approach

Abstract

Environmental Pollution is an important issue in the process of Economic Growth. The deterioration of environment begins to have direct impact on the quality of human life, or even a threat to the survival of human being. This paper is aimed at investigating whether there exists the famous inverted U shape relationship between per capita GDP and CO₂ emissions as hypothesized by Environmental Kuznets Curve (EKC).  For this purpose time series data for aforesaid factors along with FDI and Population density has been taken for the period 1991-2014 from the World Development Indicators.  The findings of the paper revealed that there is 'U' shaped relationship between per capita CO₂ emissions and per capita GDP. The paper concludes that, at Indian condition the EKC hypothesis has failed to explain the inverted relationship between per capita CO₂ emission and GDP.

Keywords: Co-integration, Granger Causality, EKC and India.