Impact of economic and green growth on poverty, income inequalities, and environmental degradation: a case of South Asian economies

Abstract

This study aims to investigate the impacts of traditional and green economic growth on poverty, income inequalities, and environmental degradation in the case of South Asian economies. In this regard, the study collects data for the period 2000 to 2018 from five South Asian economies (Pakistan, India, Sri Lanka, Nepal, and Bangladesh) from world development indicators (WDI). The study applies second-generation unit root test and co-integration technique, CIPS unit root and Westerlund co-integration tests, to establish the stationarity of the series and co-integration relationship among variables. Furthermore, this study utilized dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) models to investigate the long-run empirical estimates. The study finds that both traditional economic growth (GDP) and green economic growth (GGDP) have a negative impact on poverty and inequality; however, GGDP contributes more than traditional GDP to reducing poverty and inequality. Moreover, the study shows that economic growth has a positive long-run impact on environmental degradation while GGDP has a negative and significant long-run association with environmental degradation. The study recommends that policymakers should develop policies to develop green economic growth to save the environment and for the reduction in poverty and income inequalities in south Asian economies.

Keywords: Brown economy; Environmental degradation; Green economy; Inequality; Poverty.