Unlocking the impact of international financial support to infrastructure, energy efficiency, and ICT on CO2 emissions in India

Abstract

Financial resource constraints prevent developing nations from investing in the infrastructure needed for the green transition. For this reason, it is well known that numerous financial aid programs are offered globally, mainly to wealthy developing nations whose economies are predicated on high energy consumption. It hasn't been looked into if these resources are allocated to worthwhile projects. This study examines how foreign financial assistance in this area affects India's infrastructure emissions. The effects of natural resources, economic growth, information and communication technology, energy efficiency (oil and gas), and natural resources on the environment are being investigated as well. The novel multivariate quantile on-quantile regression technique is used in this context to examine a time-series data set spanning 2000–2021. According to the findings, there is a correlation between reduced carbon emissions and increased foreign financial aid. Likewise, advancements in energy efficiency and information and communication technologies also benefit the ecosystem. However, India's emissions are rising due to its abundant natural resources and economic expansion. Policy recommendations were made regarding the need for India to use international financial aid primarily to strengthen environmentally friendly infrastructure rather than solving problems such as current account deficit or budget deficit.