Assessing the effectiveness of total foreign aid and foreign energy aid inflows on environmental quality in India

Mantu Mahalik (), Muhammed Ashiq Villanthenkodath, Hrushikesh Mallick and Monika Gupta

Energy Policy, 2021, vol. 149, issue C

Abstract: This paper empirically examines the relative effectiveness of total foreign aid and foreign energy aid inflows on CO2 emissions in India over the period of 1978-2014 by endogenising economic growth, energy consumption, globalisation, FDI and remittances inflows as additional factors in a carbon emissions function. The results emanating from the ARDL bounds test provides evidence of a significant long-run relationship among the variables. Interestingly, it is observed that the foreign aid inflows, globalisation, and energy consumption significantly reduce CO2 emissions, whereas foreign energy aid inflows, economic growth, FDI and remittances inflows induce it. From a climate mitigation policy perspective, the results suggest that the Indian government can focus more on receiving the inflow of total foreign aid than foreign energy aid to improve the environmental quality. Given the potentiality of total foreign aid in driving the quality of the environment in India, it may be argued that much more utilisation of total foreign aid needs to be directed towards long-run investment on environmental sustainability enhancing-driven clean energy projects for an emerging economy like India.

Keywords: CO2 emissions per capita; Total foreign aid inflows; Foreign energy aid inflows; ARDL bound Test; India (search for similar items in EconPapers)
JEL-codes: C32 F35 Q49 Q53 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:149:y:2021:i:c:s0301421520307266

DOI: 10.1016/j.enpol.2020.112015

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