Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
. 2023 Oct 10;9(10):e20711.
doi: 10.1016/j.heliyon.2023.e20711. eCollection 2023 Oct.

Is fiscal deficit 'curse' or 'haven' for environmental quality in India? Empirical investigation employing battery of distinct ARDL approaches

Mohammad Asif  1 , Vishal Sharma  2 , Hari Prapan Sharma  3 , Hamad Aldawsari  1 , Showkat Khalil Wani  1 , Sunil Khosla  4 , Vinay Joshi Chandniwala  2   2
Affiliations

Is fiscal deficit 'curse' or 'haven' for environmental quality in India? Empirical investigation employing battery of distinct ARDL approaches

Mohammad Asif et al. Heliyon. .

Abstract

Undoubtedly, throughout the past half-century, environmental quality has emerged as a significant obstacle to both economic and social endeavors. Recent local and international policy debates have focused on environmental deterioration and global warming, but how governments balance economic growth and environmental sustainability is still enigmatic. For this reason, we have examined the determinants of environmental quality in India from 1972 to 2021. More specifically, we have investigated whether the fiscal deficit is 'curse' or 'haven' for environmental quality (CO2) in India. Moreover, this study deliberated four other predictors, comprising technological development (TIN), fossil fuel consumption (FFC), urbanization (Ub), and human capital index (HCI). In order to attain this objective, a range of econometric estimation techniques are employed to ensure the validity and reliability of the outcomes. For instance, we have employed a battery of ARDL approaches, such as standard ARDL, nonlinear ARDL, and multiple threshold NARDL approaches. In light of our research findings, we will be focusing directly on the examination of the NARDL and MTNARDL outcomes. This is due to the empirical evidence indicating the existence of asymmetric effects resulting from FD on CO2 emissions in India. The NARDL approach reveals that the consequence of fiscal deterioration is more pronounced, and the influence of fiscal progress is mild in terms of CO2 emission growth. Further, the outcomes of the MTNARDL approach revealed that the size of the extremely low changes in FD is much higher than the extremely high changes in FD in both models. This implies that as the FD rises, CO2 ascends more significantly, and when the FD lowers, CO2 declines progressively. In a nutshell, FD has a long-run positive and asymmetric impact on CO2 in India; thus, we may conclude that FD is considered the 'curse' for CO2 in India. Furthermore, TIN, HCI, and Ub have detrimental effects on CO2, whereas FFC stimulates CO2 in India. This research work provides some important policy implications for environmentalists, economists and macroeconomic policymakers to promote a green and healthy environment.

Keywords: Cointegration; Environmental deterioration; Fiscal policy; India; MTNARDL.

PubMed Disclaimer

Conflict of interest statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Figures

Fig. 1
Fig. 1
Analytical framework.
Fig. 2
Fig. 2
Cumulative dynamic effect of FD on CO2.
See this image and copyright information in PMC

References

    1. Evernden N. Cultural Politics in Contemporary America. Routledge; 2022. Nature in industrial society; pp. 151–164.
    1. Bradshaw C.J., Ehrlich P.R., Beattie A., Ceballos G., Crist E., Diamond J.…Blumstein D.T. Underestimating the challenges of avoiding a ghastly future. Frontiers in Conservation Science. 2021;1:9. doi: 10.3389/fcosc.2020.615419. - DOI
    1. Lu X., Zhang S., Xing J., Wang Y., Chen W., Ding D.…Hao J. Progress of air pollution control in China and its challenges and opportunities in the ecological civilization era. Engineering. 2020;6(12):1423–1431.
    1. Dafermos Y., Nikolaidi M. Springer International Publishing; 2019. Fiscal Policy and Ecological Sustainability: a Post-keynesian Perspective; pp. 277–322.
    1. Almond R.E., Grooten M., Peterson T. World Wildlife Fund; 2020. Living Planet Report 2020-Bending the Curve of Biodiversity Loss.