Modelling the asymmetric nexus between carbon emissions and COVID-19: Indian evidence employing NARDL model

ABSTRACT

After rising for decades, carbon emissions fell in 2020 by 2.3 billion tonnes. The objective of the study is to investigate the effect of COVID-19 on carbon emissions in India by employing the nonlinear autoregressive distributed lag model over the period March 25, 2020, to August 31, 2021. Unit root test confirms that all variables are integrated at order I(0) and I(1). Bounds test supports long-run association amongst the variables. Results of the study validate the asymmetric relationship between COVID-19 determinants and CO2 emissions. It presents that lockdown has significantly reduced the CO2 emissions. This asymmetric relationship indicates that COVID-19 has become the major cause of reduction in greenhouse gases, but this cannot be treated as a permanent solution to environmental destruction. Thus, the study suggested that governments and policymakers should formulate FDI policy on high-tech low carbon technology while preparing a strict environmental access system and promote environmentally sustainable investment through subsidies.