Asymmetric nexus among financial globalization, non-renewable energy, renewable energy use, economic growth, and carbon emissions: impact on environmental sustainability targets in India.

Abstract

Financial globalization has been argued to contribute to the increase/decrease in greenhouse gases and hence global temperature. India, according to International Energy Agency (IEA), is the third largest emitter of greenhouse gases globally, where the consumption of the few rich produces about seven times carbon emissions when compared with the poorest households. This current research explores the asymmetric effect of financial globalization on carbon emissions, while controlling for non-renewable energy utilization, renewable energy consumption, and economic expansion. The study uses yearly data stretching from 1970 to 2018 and batteries of econometric approaches in order to investigate these associations. The outcomes of the NARDL unveiled that (i) a positive (negative) shock in non-renewable energy utilization increases (decrease) carbon emissions; (ii) favorable (unfavorable) variations in renewable energy consumption decrease carbon emissions; (iii) a favorable shock in financial development contributes to carbon emissions; and (iv) a positive shock in growth impacts carbon emissions positively. Based on the empirical outcomes, we are of the opinion that policymakers should intensify efforts in putting in place appropriate environmental policy (green economy) that emphasizes the importance of renewable driven economy via energy-saving and energy-efficient technologies. Else, increased consumption on non-renewable energy sources among the few rich in India and any other countries struggling with implementing green economy would be devastating to both the immediate and future generations.