Relationship Between Environmental Sustainability and Human Development Index: A Case of Selected South Asian Nations

All the economists today have established that externalities (free-rider issues) and public goods are the leading causes of market failure, holding the utmost level of relevance of environmental economics. Pollution types can be segregated physically based on the channels (water, air and land) or the sectors responsible for causing it (e.g., industry, electricity generation, transport, agricultural waste disposal, etc.). Thus, sustainability emerges as a key challenge of the twenty-first century for public think tanks and business communities in the form of carbon emissions and global warming. So, in order to understand the role of sustainability in the era of development, the overall broader purpose of the current study is to study the quantitative linkages between human development index (HDI) (a sustainability measure of standard of living, i.e., per capita GDP) and environmental performance index (EPI, measure of environmental health and ecosystem vitality) for the selected South Asian nations (SANs) and comparative analysis of India with the selected developing nations from 2002 to 2016. To test whether the degree of economic expansion and standard of living have a systematic relationship with the level of environmental deterioration (existence of Kuznet curve hypotheses) in a country which poses a future threat to the global warming potential (GWP), the study employs dynamic panel modelling on selected SANs, followed by descriptive graphical synthesis to visualize the association for India in particular. Several other macroeconomic and capital flow variables, such as energy consumption, direct foreign investment and so on, are considered in the extended empirical model development in order to supplement the holistic review of the situation. The findings of the panel analysis discover HDI to be positively associated with EPI, depicting higher human capital accumulation leading to lower environmental damage and better environmental performance. Additionally, the results confirm the deviation from environmental Kuznet curve (EKC) hypotheses to link economic growth positively with climatic worsening (due to recent reversals). The study finds its niche to separate it from various other studies as it includes human capital accumulation in order to find its effect in the long run on sustainability indicator. The overall results suggest crucial policy implications. The combined efforts of government at local and national levels could help in infusing green technology-based infrastructure. Additionally, environment trading system (ETS) could further be promoted in developing nations, particularly in many Western developed nations, in order to have a greener sustainable future.