Asian Journal of Economics, Finance and Management

Rapid urbanisation has become a defining feature of economic transformation in developing countries, raising growing concerns about its environmental consequences. Using yearly time-series data from 1974 to 2023 from the World Bank's World Development Indicators, this research investigates the long-term link between urbanisation, energy consumption, trade openness, and carbon dioxide (CO₂) emissions (total) excluding Land Use, Land-Use Change and Forestry (LULUCF) in India. The Augmented Dickey–Fuller (ADF) test is used to analyse the stationarity qualities of the variables. The results show a mixed order of integration, which supports the use of the Autoregressive Distributed Lag (ARDL) bounds testing method. A stable long-term equilibrium connection between the variables is confirmed by the empirical findings. According to the projected long-run coefficients, the most significant factor influencing CO2 emissions is urban population, followed by energy consumption. Trade openness also has a positive but relatively little impact on environmental deterioration. The statistically significant and negative error correction term confirms the existence of a stable long-run equilibrium and indicates the speed of adjustment towards that equilibrium following temporary deviations. Furthermore, the stability and diagnostic tests show that the estimated model is stable and statistically sound throughout the sample duration. The results indicate that in order to lower Total CO₂ emissions and promote India's long-term sustainable development goals, sustainable urban design, increased dependence on renewable energy, improvements in energy efficiency, and environmentally conscious trade policies are crucial.