Advocating green economy in India: The tug of war among income inequality, export diversification, and environmental quality

Abstract

AbstractGlobally, most countries have shown strong commitments toward the attainment of sustainable development goals before 2023. Thus, this study focuses on analyzing such commitments toward the attainment of SDGs (7, 8, 10, and 13), respectively. The study evaluates the role played by income inequalities, export diversification, and economic growth in restoring a sustainable environment in India from 1970 to 2019. To achieve its objective, the study employed the novel Fourier autoregressive distributed lag (ARDL) method. Remarkably, the study utilizes the load capacity factor (LCF) as a unique indicator for environmental sustainability. The LCF, which takes into account both biocapacity and ecological footprint, is one of the most complete indicators of environmental quality to date. The study's findings revealed a long‐run relationship between the LCF and all the explanatory variables. According to the Fourier ARDL results, income inequality and renewable energy improve environmental quality. At the same time, economic growth and export diversification negatively impact the LCF in India both within the short and long‐run periods. Conclusion and policy prescriptions are included in the study.