This paper seeks to examine the response of agricultural productivity to climatic change and its long-run impact on economic growth in the Indian economy. The Auto Regressive Distributed Lag (ARDL) model and Error Correction Model (ECM) based techniques are applied to examine the long-run and short-run relationship between CO2 emissions, agricultural productivity and economic growth during the period 1971-2011. The estimated outcomes depict the existence of a positive and significant relationship between agricultural productivity and economic growth in the country both in the long-run and in the short-run. However, the impact of CO2 emissions on economic growth is estimated to be negative and statistically significant in the long-run. The study has also applied the Granger causality test to explore the long-run causal relationship between the variables in the model. The outcome depicts a long-run causal relationship that establishes a unidirectional causality running between agriculture productivity and economic growth in the country. This establishes that agriculture contributes to economic growth and in turn economic growth also encourages agricultural productivity in the country. The study also observes a bidirectional causality running from economic growth to CO2 emissions in the country. The rising economic growth enhances CO2 emissions and in turn it affects the agricultural productivity in the country. This requires on the part of the policy makers to consider the development of agriculture as an important aspect of the developmental goal to achieve the inclusive growth rate in the country.
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