Role of Structural Transformation in Reducing Carbon Emissions

An enormous obstacle to achieving sustainable development is the impact of climate change, which is a complex and multi-faceted challenge. This research aims to provide an unbiased assessment of the effects of changes in economic structure, use of renewable energy, and environmental levies on carbon dioxide emissions in India from 2001 to 2022. This study utilizes the autoregressive distributed lag (ARDL) bounds testing method and the Error Correction Model to analyze the relationship between carbon emissions and their major determinants over the long and short term. The results show that carbon emissions are reduced as a result of environmental taxes, the use of renewable energy sources, and the overall shift toward service-based industries. There is evidence that activities related to agriculture contribute to higher levels of carbon emissions. The study’s results suggest that shifting focus from the primary and secondary sectors to the service sector might help tackle and lower carbon emissions. Cleaner and more environmentally friendly technology must also replace antiquated methods in manufacturing. A sustainable and low-carbon future can be achieved by following the study’s recommendations for a comprehensive strategy. This study intends to objectively evaluate the effects of changes in economic composition and environmental levies on carbon dioxide emissions.