Zero Emissions and Zero Unemployment: A Feasible Future or Conflicting Objectives?

Abstract

Achieving high economic growth along with low unemployment rates and better environmental quality presents a key challenge for economic policy. The study investigates the validity of the Environmental Phillips Curve (EPC) and Environmental Kuznets Curve (EKC) hypotheses in India. This study utilizes a range of econometric methodologies, encompassing the Autoregressive Distributed Lag (ARDL) model, the combined cointegration test, and the Toda-Yamamoto causality test, to analyze annual time series data spanning the period from 1991 to 2022. The findings confirm the validity of the EPC in both the long-and short-run. However, the evidence does not provide strong support for the EKC hypothesis. Among control variables, capital formation and GDP per capita has adverse impacts on environmental quality, while renewable energy consumption has no significant impact. For India, with the world’s largest young population, environmentally friendly job creation is crucial. Developing energy-efficient technologies and increasing investment in renewables are key to balancing zero-emission and zero-unemployment goals.