Human Capital and Carbon Emissions: The Way forward Reducing Environmental Degradation

Abstract

Many environmental problems are human induced, one of which is the change in atmospheric composition, a hot research topic in recent decades. This study aims to investigate the impact of human capital (HC) on carbon dioxide (CO2) emissions in Sri Lanka using time series annual data from 1978 to 2019. The time series data were examined for a unit root problem and an unknown structural break. An autoregressive distributed lag (ARDL) approach was employed to identify the long-run relationship between HC and CO2. The results confirm the long-term relationship between carbon emissions and human capital. As a unique finding of this research, the estimated coefficient of human capital to carbon emission is negative and statically significant, suggesting that a 1 percent increase in HC decreases carbon emissions by 1.627789 percent. The significance of this finding is that it can help achieve Sustainable Development Goal “13”, which focuses on combating climate change and its effects. The study indicated that building in HC by investing more in education helps to reduce carbon emissions in the long term. It reflects that human capital accumulation is linked to reduced environmental degradation due to lower CO2 emissions.