Climate Policy and Green Economy Journal

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Macroeconomic Determinants of Environmental Degradation in India: An Empirical Investigation

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https://doi.org/10.54963/cpgej.v1i1.2251
Sinha, J. K. (2025). Macroeconomic Determinants of Environmental Degradation in India: An Empirical Investigation. Climate Policy and Green Economy Journal, 1(1), 19–37. https://doi.org/10.54963/cpgej.v1i1.2251
Volume 1 Issue 1 (2025)
Copyright (c) 2025 Jitendra Kumar Sinha
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Authors

  • Jitendra Kumar Sinha

    Independent Researcher, Bengaluru 560076, India

Received: 7 May 2025; Revised: 28 June 2025; Accepted: 3 July 2025; Published: 10 July 2025

Understanding the macroeconomic drivers of environmental degradation is essential for formulating effective sustainability strategies in emerging economies. This study examines the long-run and short-run relationships between environmental degradation and key macroeconomic factors in India, including economic growth, energy consumption, industrialization, trade openness, urbanization, and renewable energy use over the period 1990–2023. Using annual time-series data and applying the Autoregressive Distributed Lag (ARDL) bounds testing approach with an error-correction framework, the analysis confirms the existence of a stable long-run equilibrium relationship among the variables. The results indicate that economic growth and conventional energy consumption exacerbate environmental degradation in the long run, reflecting persistent scale effects and fossil fuel dependence, while trade openness and renewable energy adoption mitigate environmental pressures through technological diffusion and cleaner energy transitions. Urbanization emerges as a significant structural driver of environmental stress, particularly in the long run, highlighting the role of unplanned urban expansion and rising energy demand. The short-run dynamics reveal meaningful adjustment processes, suggesting that environmental outcomes respond gradually to macroeconomic and policy shocks. Overall, the findings imply that achieving environmental sustainability in India requires accelerating the energy transition, promoting low-carbon industrial development, strengthening sustainable urban governance, and systematically integrating environmental objectives into national growth and trade policies to decouple economic development from environmental degradation.

Keywords:

Environmental Degradation Economic Growth Energy Consumption Renewable Energy Trade Openness Urbanization Industrialization ARDL Bounds Testing India

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