Abstract
This paper investigates the nexus between CO2 emissions (CO2E), GDP, energy use (ENU), and population growth (PG) in India from 1980-2018 by comparing the "vector error correction" model (VECM) and "auto regressive distributed lag" (ARDL). We applied the unit root test, Johansen multi-variate cointegration, and performed a Variance decomposition analysis using the Cholesky approach. The VECM and ARDL-bound testing approaches to cointegration suggest a long-term equilibrium nexus between GDP, energy use, population growth and CO2E. The empirical outcomes show the existence of a long-term equilibrium nexus between the variables. The Granger causality results show that short-term bi-directional causality exists between GDP and ENU, while a uni-directional causality between CO2E and GDP, CO2E and ENU, CO2E and PG, and PG and ENU. Evidence from variance decomposition indicates that 58.4% of the future fluctuations in CO2E are due to changes in ENU, 2.8% of the future fluctuations are due to changes in GDP, and 0.43% of the future fluctuations are due to changes in PG. Finally, the ARDL test results indicate that a 1% increase in PG will lead to a 1.4% increase in CO2E. Our paper addresses some important policy implications.