Is Agricultural Production Responsible for Environmental Degradation in India? Implications for Sustainability Based on Panel Data Analysis

Abstract

The study aims to investigate the impact of agricultural production on environmental degradation in the case of India, an emerging market economy, based on time series data from 1990 to 2020. Methane (CH4), nitrous oxide (N2O), and carbon dioxide (CO2) emissions have been used as indicators of degradation. Autoregressive distributive lag bound tests examine the long-run cointegrating relationship among the variables. To investigate the existence of the environmental Kuznets curve (EKC) between agricultural production and CH4, N2O, and CO2, we used a fully modified ordinary least squares (FMOLS) technique, and the robustness of the results of FMOLS were checked by dynamic ordinary least squares estimators. We also used Granger causality to check for unidirectional and bidirectional causalities. Results indicate an inverted U-shaped relationship in the case of both CH4 and N2O emission, thus confirming the EKC hypothesis. The relationship of CO2 emission with agricultural production does not verify the EKC hypothesis, and we find a U-shaped relation in the long-run. Lastly, policy measures have been suggested to mitigate greenhouse gas emissions from agricultural activities that may help attain a more sustainable economy. JEL Classification Q1, Q22, Q23, Q53, C33