Decomposing the Effects of Trade Liberalisation on Scale, Compositional and Technique Effects of Pollution in India.

This paper studies the environmental impacts of trade liberalisation in India. The period of analysis is 1991 - 2018. For this study, the carbon dioxide emissions are taken as a proxy variable to air pollution and the pollution is divided into scale effect, composition effect and technique effect. The Auto Regressive Distributed Lag Model is applied in order to check out the long run association of the variables. The results suggest that the trade is positively related to carbon dioxide emission and are statistically significant. The results suggest that the scale effect is responsible for increasing carbon emissions in India. The technique effect is statistically significant and is negatively related to carbon dioxide emissions. After looking at error correction, it has also been established that the long-run equilibrium relationship between the variables is valid. According to the ECM, 84 percent of the adjustment happens gradually over time. [ABSTRACT FROM AUTHOR]