Impact of Renewable Energy Adoption on CO₂ Emissions in India

Abstract

This study uses Autoregressive Distributed Lag (ARDL) bounds and the Toda–Yamamoto Granger causality test to assess the impact of renewable energy on CO₂ emissions in India using annual data from 1970 to 2024. The findings of this study showed that India follows a carbon-intensive growth trajectory since GDP growth increases CO₂ emissions. Hydropower consumption has a positive impact on CO₂ emissions, thereby showing limited mitigation potential. Nuclear energy consumption is negatively correlated with CO₂ emissions. The Toda–Yamamoto Granger causality analysis showed unidirectional causality from GDP to CO₂ emissions, nuclear energy, and hydropower, while bidirectional causality (feedback) exists between CO₂ emissions and both nuclear energy and hydropower. The findings suggest that India needs an integrated energy and environmental policy, as the effectiveness of renewable and low-carbon energy sources is outweighed by rapid economic growth.