From pollution to prosperity: Using inverted N-shaped environmental Kuznets curve to predict India’s environmental improvement milestones

The purpose of this study is to establish the nature of the Environmental Kuznets Curve and forecast the out-of-sample turning points of the environmental improvement phase using different Gross Domestic Product per capita growth rates. The study further attempts to understand how much growth is needed to shorten the environmental degradation phase of the Environmental Kuznets Curve. By using the Autoregressive Distributed Lag model and its non-linear variant on the ecological footprint data, we show that India has an inverted N-Shaped Environmental Kuznets Curve. Our results show that India is currently in an increasing environmental degradation phase and is likely to enter the environmental improvement phase in the future. The projections based on hypothesised annual average growth rates of 3 percent, 3.5 percent, 4 percent, 4.5 percent, 5 percent, 5.5 percent, 6 percent, and 6.5 percent—show that the current deterioration phase will finish in 2038, 2036, 2034, 2032, 2031, 2030, 2029, and 2028, respectively. Therefore, we conclude that faster growth in Gross Domestic Product per capita shortens the environmental degradation phase and induces the economy to quickly reach the environmental improvement phase.