Does overseas eco‐friendly innovation collaboration matter for environmental quality sustainability in India?

• Published date: 01 June 2022
• Author: Muhammed Ashiq Villanthenkodath,Mantu Kumar Mahalik
• Date: 01 June 2022
• DOI: http://doi.org/10.1111/opec.12232

Does overseas eco-friendly innovation

collaboration matter for environmental

quality sustainability in India?

Muhammed Ashiq Villanthenkodathand Mantu Kumar Mahalik

Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur, West

Bengal 721302, India. Email: ashiqv55@iitkgp.ac.in Email: mkm@hss.iitkgp.ac.in

Abstract

The nexus between technological innovations and environmental quality has been much discussed

in the f‌ield of energy economics and policy. However, the role of overseas eco-friendly innovation

collaboration on environmental quality in India remains unaddressed. In such a line, our study

raises the question of whether overseas eco-friendly innovation collaboration and total

technological innovations collaboration are important towards health protection of the natural

environment in India. This motivates us to study their effects on India’s carbon dioxide emissions

function in the presence of energy consumption and economic growth as important control

variables. The usage of annual data from 1985 to 2016 permits us to use traditional and structural

break unit root tests before the application of ARDL model to evaluate the long-run relationship

between the variables. Besides conf‌irming the long-run relationship among the variables, we f‌ind

that eco-friendly innovation and total innovation collaborations drive health of the natural

environment while energy consumption impedes it. The adverse effect of economic growth on

environmental quality becomes ineffective. These f‌indings are robust to the usage of alternative

techniques, urging climate policymakers in India to house greater overseas eco-friendly innovation

collaboration with other advanced and emerging economies to drive environmental quality

sustainability in the long run.

1. Introduction

Natural capital is the stock of assets found from the nature that include water,soil and

air. It is important to maintain the natural capital for present and future generations

because it provides the life-supporting system for humans and other species living on the

planet. For instance, people drink water, breath air, take food and energy. Moreover,

sustaining the natural environment is essential towards mitigating the needs of people,

animals and other species living in the ecosystems. Whether it is consumption and

production activities, everything depends on the use of natural resources found in nature

(Dasgupta, 1990,1996; Beckerman, 1992). Therefore, ill-managed natural capital not

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250

only generates the liability on ecology, but also produces the signif‌icant liability for

economic and social conditions. Moreover, the valuation of environmental loss is often

conducted in terms of negative externality created through production and consumption

activities of an economy. It is also true that no society/economy will survivewithout

ecosystems as it not only provides f‌isheries and forest as sources of f‌ish and timber but

also assimilates waste, controls f‌lood, mitigates drought and preserves valuable soil

(Dasgupta, 1996,2013). Therefore, nature is a currency to the survival of human life

(Deschˆ

enes and Greenstone, 2011), and it also promotes human capabilities

1

in the long

run (Dasgupta, 2013). Moreover, the well-being of the people increases if natural capital

as a part of productive base increases

2

(Dasgupta and M¨

aler, 2000; Mumford, 2016).

In this century, the choices we humans make and actions we humans create that

affect health of the natural environment in long run. Eventually, the natural environment

suffers from the depletion of sustainable existence due to humans’excessive use of the

natural resources, which cause the massive concentration of carbon dioxide emissions in

the surface and atmosphere

3

(Dasgupta, 2013; Intergovernmental Panel on Climate

Change, 2014). The massive accumulation of carbon emissions has changed the world’s

climate in terms of temperature rising and weather variability (Schlenker and Roberts,

2008). As a result, climate change and global warming are the hardest consequences for

the livelihood of people and other species living in the ecosystems. The environmental

consequences for living people and species are acceptable if capacity of the natural

environment absorbs the heats and pollution. The environmental consequences are

believed to be many folds for people if ecological overshooting exceeds its threshold

level. Ecological overshooting is obvious for many emerging economies because they

continue to grow at a much higher space, putting demand pressure on the extraction and

usage of the natural resources. However, the higher economies of scale are essential for

emerging countries because it enables them to retard the incidence of poverty, hunger,

unemployment, inequality, f‌inancial crisis and external threat. These emerging

economies will stand in the danger of climate change and global warming if the

balance between the human system and life-supporting planetary system decouples in

the long run. The consequences of climate change and global warming (i.e.

environmental unsustainability) will be a threat to the life expectancy of animals and

also will create a possibility of prosperity loss in the long run.

In this vein, environmental modelling becomes a thrust area of research among the

scholars around the world. While modelling climate change, the widely used

determinants in the literature consist of economic growth and energy consumption

(Grossman and Krueger, 1991; Shaf‌ik and Bandyopadhyay, 1992; Grossman, 1993;

Panayotou, 1993; Selden and Song, 1994; Stern et al., 1996; Apergis and Payne, 2010;

Alam et al., 2011; Sohag et al., 2017; Khan et al., 2019a). The rationale for

incorporating economic growth in carbon emissions function is that the rate of economic

©2022 Organization of the Petroleum Exporting CountriesOPEC Energy Review June 2022

Environmental quality sustainability in India251

growth depends on the usage of natural resources. If economic growth is fossil fuels (i.e.

coal, oil and natural gas) dependent, then burning fossil fuels help us to produce the

higher level of output, eventually larger carbon emissions are also expected in the land

and atmosphere, and thereby increasing the greenhouse gas emissions. The concentration

of greenhouse gas emissions in the surface and atmosphere leads to climate change and

global warming. In such line, the recent study argues that though India is growing due to

its robust economic growth trajectory (Ha et al., 2019), people in India remain more

vulnerable to climate crisis in spite of having impressive economic growth (Udemba

et al., 2021). Hence, it is vital to accommodate economic growth while modelling the

carbon emissions function in India.

The incorporation of energy consumption as one of the important determinants in

carbon emissions modelling is justif‌ied because burning fossil fuels could help us to

grow but at the cost of the natural environment. The reason is that fossil fuels are

considered as dirty energy, which creates pollution in the environment. For example,

consumption of primary energy in India has nearly tripled between 1990 and 2018,

reaching an estimated 916 million tons of oil equivalent. Coal being a part of fossil fuels

continued to supply most (45 per cent) of India’s total primary energy consumption in

2018, which is more carbon-intensive and also placed the Indian economy in 2018 as the

fourth largest carbon emitting countries (7 per cent) in the world after China (27 per

cent), the United States (15 per cent) and European Union (9 per cent).

4

Besides, the recent studies included technological innovation in carbon emissions

function to analyse the effect of technology on the natural environment (Ahmad et al.,

2021; Khattak et al., 2020; Shahbaz et al., 2020; Villanthenkodath and Mahalik, 2020).

As we know that an economy can propel its long-run growth by adding the technological

innovation into the production function. If energy-saving and pollution-internalising

technologies are utilised in the production, distribution and consumption of commodi-

ties, then energy eff‌iciency and lesser environmental pollution can be expected in the

long run. In this context, it can be further argued that an economy can thrive on the

growth front and can also ensure sustainable green environment. Perhaps, we can

conclude that though India’s economic growth and development are happening due to

the adoption of technology

5

, but there is a need to understand its impact on the natural

environment within a time series framework.

In view of the above, various climate change mitigation measures have been

implemented at the national and international levels to tackle the climate crisis. But the

solution towards climate change mitigation remains unsatisfactory (see Fig. 1). Figure1

shows that carbon emissions per capita in India continue to grow, which is also much

higher than the South Asia region. The rational for using CO

2

emissions as a proxy for

ecological grief is guided by the Kyoto protocol, in which an agreement has signed to

curb CO

2

emissions since it identif‌ied as the prime cause for global warming and

OPEC Energy Review June 2022©2022 Organization of the Petroleum Exporting Countries

252 Muhammed Ashiq Villanthenkodath and Mantu Kumar Mahalik