Examining the Nexus Between Cost Overrun of Central Projects and N₂O Emissions: An Analysis for India

It is a well-known fact that infrastructural projects have long-run impacts on the income and employment of the countries. Besides, it is also the fact that these projects badly impact the environment in terms of pollution through emissions of different greenhouse gases and particulate matters. Further, if the projects get delayed due to some reasons there arises the additional emissions burden upon the environment. Under the backdrop, the present study aims to examine whether cost overruns in different infrastructural projects have any sort of co-movements with the emissions of nitrous oxide (N₂O), which is the prime pollutant in infrastructural projects, in case of India for the period 1995–2018. Employing Engle-Granger cointegration test technique, the study finds a significant persistent relationship between the cost overrun of delayed central sector projects and nitrous oxide in India. The study also finds negative but insignificant coefficient of the error correction term in the ECM. Finally, the Granger causality test demonstrates that cost overrun has had no effect on or influences environmental degradation in India due to N₂O emissions in the short term. The government of the country should apply good governance tools to control the problems of cost overruns.