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Achieving fast and inclusive economic growth concurrently with greenhouse gases (GHG) emission control could have wide-ranging implications for the Indian economy, predominantly fuelled by fossil energies. India faces high income inequality with the bottom 50% of its population owning only 2% 2 of total national wealth. Other developmental challenges include 304 million people living in poverty, 269 million without access to electricity, 92 million without access to safe drinking water, and around 2 million homeless. Despite such challenges, India has committed to reduce the GHG emission intensity of its GDP 33% to 35% below its 2005 level by 2030, including via turning 40% of its power-generation capacity away from fossil sources. To explore the macroeconomic consequences of achieving development along low-carbon pathways, we use a hybrid modelling architecture that combines the strengths of the AIM/Enduse bottom-up model of Indian energy systems and the IMACLIM top-down economy-wide model of India. This hybrid architecture stands upon an original dataset that reconciles national accounting, energy balance and energy price statistics. With this tool, we demonstrate that low-carbon scenarios can accommodate yearly economic growth of 5.8% from 2013 to 2050 i.e. perform close to if not slightly higher than our business-as-usual scenario, despite high investment costs. This result partly stems from improvement of the Indian trade balance via substantial reduction of large fossil fuel imports.Additionally, it is the consequence of significant shifts of sectoral activity and household consumption towards low-carbon products and services of higher value-added. These transitions would require policies to reconcile the conflicting interests of entrenched businesses in retreating sectors like coal and oil, and the emerging low-carbon sectors and technologies such as renewables, smart grids, electric vehicles, modern biomass energy, solar cooking, carbon capture and storage, etc.

Although a rapidly growing economy, India faces many challenges, including in meeting the Sustainable Development Goals of the United Nations. Moreover, post-2020 climate actions outlined in India's Nationally Determined Contribution (NDC) under the Paris Agreement envision development along low-carbon emission pathways. With coal providing almost three-quarters of Indian electricity, achieving such targets will have wide-ranging implications for economic activity. Assessing such implications is the focus of our research. To do so, we use a hybrid modelling architecture that combines the strengths of the AIM/Enduse bottom-up model of energy systems and the IMACLIM top-down economy-wide model. This hybrid architecture rests upon an original dataset that brings together national accounting, energy balance and energy price data. We analyse four scenarios ranging to midcentury: business-as-usual (BAU), 2°C, sustainable 2°C and 1.5°C. Our 2°C pathway proves compatible with economic growth close to the 6% yearly rate of BAU from 2012 to 2050, at the cost of reduced household consumption but with significant positive impact on foreign debt accumulation. The latter impact stems from improvement of the trade balance, whose current large deficit is the primary cause of high fossil fuel imports. Further mitigation effort backing our 1.5°C scenario shows slightly higher annual GDP growth, thereby revealing potential synergies between deep environmental performance and economic growth. Structural change assumptions common to our scenarios significantly transform the activity shares of sectors. The envisioned transition will require appropriate policies, notably to manage the conflicting interests of entrenched players in traditional sectors like coal and oil, and the emerging players of the low-carbon economy. Key policy insights. Low carbon pathways are compatible with Indian growth despite their high investment costs. Moving away from fossil fuel-based energy systems would result in foreign exchange savings to the tune of $1 trillion from 2012 to 2050 for oil imports.. Achieving deep decarbonization in India requires higher mobilized capital in renewables and energy efficiency enhancements.. Phasing out fossil fuels would, however, require careful balancing of interests between conventional and emerging sector players through just transitions.

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PurposeThis paper aims to provide a systematic review of the research focusing on the decarbonization strategy of businesses, stock return performance, and investment styles.Design/methodology/approachThe paper utilizes bibliometric methods and content analysis to present a broad overview of the research on the association between decarbonization strategies in businesses and financial performance in the last few decades. The final dataset contains 272 records published between 2001 and early 2021, available in the Web of Science (WoS) database.FindingsThe authors find a relatively small number of publications before 2010 and the research focus increases only after 2016. There exists limited knowledge on the links between climate change strategies and firm performance till date. The top management journals have also failed to respond to the importance of decarbonization strategies in firms and their relationship with stock returns and investment styles. Furthermore, there is a limited indication of publications from ecology and the environmental sciences, in general, being included or cited by the business and management research studies, thus highlighting weak network linkages between the two fields.Research limitations/implicationsThe study contributes to the literature on decarbonization strategies of businesses, and the strategies' relation with firm performance by consolidating the extant research and thus finding the research gaps and research areas that require further investigation.Practical implicationsFor the industry professionals, this research provides a comprehensive repository of articles on incorporating decarbonization strategies in industry professionals' decisions on improving firm performance.Originality/valueThis paper examines the history and development of themes, related to firms' emission mitigation strategies, firm performance and investment styles, across the journal articles in the WoS database published from 2001 to early 2021. In addition, the authors highlight research directions and the need for research on sustainable strategies in businesses, stock return, and investment styles.