Abstract:
This study examines the long- and short-run dynamics of trade openness, economic growth and CO sub(2) emissions in India within the environmental Kuznets curve (EKC) framework. Drawing on annual data spanning from 1971 to 2021, the autoregressive distributed lag bounds testing approach is employed alongside the Bai-Perron multiple structural break controls, estimated across three interconnected specifications, namely an economic growth model, an environmental quality model and a nonlinear EKC model. Stable long-run cointegrating relationships are confirmed across all specifications. The EKC hypothesis is supported by the coefficient estimates, with an estimated income turning point of approximately dollar 6,300 per capita, which is well above India's current income level, implying that CO sub(2) emissions will continue to rise with economic growth if there is no deliberate structural intervention. Trade openness increases emissions in the long run as scale effects dominate, indicating a scale-effect-driven trade pattern in India. Energy consumption emerges as the dominant long-run driver of emissions. Structural breaks identified in 1978, 1984, 2009 and 2014 capture India's major developmental transitions and are found to exert persistent effects on both growth and emissions. The findings underscore that India's 2070 net-zero commitment requires an integrated trade-energy-climate policy framework rather than reliance on income-driven environmental improvement alone.
