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Long-Term Impacts of Environmental and Economic Growth on GHG With Temperature, Rainfall, Energy Usage, GDP, and Employment Variations in India: A VECM Analysis (1980-2023)
Abstract
This paper examines the dynamic relationship among CO2 emissions and some significant economic and environmental variables in India in a VECM approach during the period from 1980 to 2023. In the analyses performed, carbon dioxide (CO2) emissions have been considered as the dependent variable, while the independent variables are temperature and rainfall, energy use, employment, and GDP. Using unit root tests and Johansen's cointegration analysis, the long-run relationships among these variables are identified, detecting five cointegrating equations at a 5 percent significance level. The results indicated that temperature, rainfall, energy use, employment, and GDP growth are significantly impacting CO2 emission with impacts appearing after one period lag. Some variables associate positively with CO2 emissions, including temperature, energy use, and employment but rainfall is inversely related to CO2 emissions. This postulates that as the economic activities and energy use increase, causes emit more CO2, the result is an unstable environment characterized by reduced rainfall.
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