Transitioning towards a sustainable environment: the dynamic nexus between economic complexity index, technological...

This paper aims to investigate the dynamic nexus between economic complexity index (ECI), technological development (TIN), human capital (HC) and environmental quality in India for transition towards a sustainable environment. This study is based on secondary data covering the period from 1985 to 2018. For empirical analysis, this study applied "Stochastic Impacts by Regression on Population, Affluence, and Technology" (STIRPAT) model framework under the estimation of autoregressive distributed lag (ARDL) model and vector error correction model (VECM) model. The empirical findings of model 1 show ECI, TIN, HC and urbanization (URB) as the helping hands to mitigate the problem of environmental degradation by shrinking the level of EF, whereas for model 2, ECI and TIN failed to influence the CO₂ emissions, but HC served as a stimulant for environmental quality enhancement by declining the level of CO₂ emissions. In contrast, GDP growth and URB strengthen the CO₂ emissions levels. Moreover, in VECM framework, estimated findings reveal that the covariables Granger-cause EF and CO₂ emissions, inferring that causality flows asynchronously from its covariables to EF and CO₂. Impulse response function (IRF) revealed that the responses in EF and CO₂ emissions ascribed to changes in its covariables. The outcome of the study has some implications for environmental policy strategists to prepare sustainable environment policies and other responsible authorities for sustainable development goal (SDGs), academician and scholars. All the stakeholders involved in environmental economics and policymakers can evaluate this study to design proper policy framework with respect to the environment. There are few studies that explore the dynamic nexus between ECI, TIN and HC with environmental quality in the control environment of URB and GDP growth using the STIRPAT model for India.