Abstract

The main purpose of this paper is to examine the long run causal relationship between the economic development and carbon emissions level and to examine the existence of EKC hypothesis in Bihar, India. The time series analysis is done for the period 1971-1999, covering a time span of 29 years and the variable selected for analysis are 𝐶𝑂2 emissions level and real per capita Gross State Domestic Product of Bihar, India. The time series data was collected from different sources. To investigate the short and long run relationship between these two variables, the ARDL co-integration test was performed and to test the causal relationship between the variables, Granger Causality test was applied. Finally, to test the EKC hypothesis, OLS (Ordinary Least Square) regression was performed. The results of ARDL co-integration test suggests that there is a long run relationship or co-integration among the variables 𝐶𝑂2 emissions and real per capita GSDP. The Granger Causality test results points to unidirectional relationship between 𝐶𝑂2 emissions and real per capita GSDP, i.e., real per capita GSDP does Granger cause 𝐶𝑂2 emissions. The results of quadratic form of EKC model indicates that there is evidence of EKC hypothesis and the results of cubic form of EKC model shows that the inverted U-shaped curve does not exist, it would be N-shaped curve in Bihar, India.

Keywords

References

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