Investigating the asymmetric impact of renewable energy consumption and trade openness for carbon emission abatement using N-ARDL approach: a case of India

Abstract

PurposeThis study investigates the asymmetric influence of renewable energy consumption (REC) and trade openness (TO) in the pathway of decarbonizing of Indian economy.Design/methodology/approachBy exploiting fifty years of annual time series data spanning from 1970 to 2019 with the augmentation of nonlinear autoregressive distributed lag technique with the consideration of GDP and industry value added (IVA) as control variables.FindingsOur This research not only demonstrates the asymmetric association among the employed variables but also shows that negative shock to REC stimulates emissions, where as positive shock on the same policy variable promotes environmental quality improvement. Negative shock to TO is found to be associated with the corresponding increase of environmental quality, but the positive shock on the same intensifies environmental pollution. IVA is also found to be associated with intensifying environmental squalor. In addition, the research provides the empirical evidence of existence of “EKC” hypothesis in India as long-run coefficient associated with GDP looks smaller than short-run coefficient of GDP.Research limitations/implicationsIt was difficult to include may other causal variables due to nonavailability of data pertaining to those variables.Practical implicationsMoreover, some policy guidelines have also been recommended for India at the end that may aid India to achieve net zero emissions by 2070.Originality/valueThis is an original research paper carried out by the authors and has not yet been submitted elsewhere.