Abstract
Environmental concerns have been the pivot around which most of the international and national discussions revolve. All industrialized and developing economies strive to reduce their footprints and achieve a sustainable environment. India has seen tremendous economic growth in the past few decades; environmental concerns have somehow been overlooked in this process. Therefore, the study aims to investigate the environment- economy nexus. To analyze the impact of trade globalization and regulatory quality on the environmental quality of the Indian economy, the study employs the autoregressive distributed lag (ARDL) model. ADF unit root test is applied to test the stationarity, and Akaike Information Criteria (AIC) is used to select the lag order followed by the long run form and bounds test for testing the existence of cointegration. ARCH and LM tests are applied to test for heteroscedasticity and autocorrelation respectively. CUSUM & CUSUM2 is used to test the stability of the model. Our findings indicate a positive relationship between ecological footprint, per capita GDP, and biocapacity, indicating that economic growth and biocapacity hurts the environment, whereas, trade globalization de facto, regulatory quality, and urbanization have a plummeting impact on ecological footprint. The results bear testimony to the fact that strict green regulations to boost ‘clean’ trade, increased environmental awareness, and well-planned urban development are the key to a sound economy and a sustainable environment.