Energy consumption, carbon emissions and economic growth in India

Abstract

Purpose – The purpose of this paper is to empirically examine the long run and causal relationship between energy consumption, carbon emissions and economic growth in India over the period 1971-2009 within multivariate framework. Design/methodology/approach – The study uses the Johansen cointegration test to examine the possible long-run equilibrium relationship followed by Granger causality test based on vector error correction model to explore short- and long-run causality between energy consumption, carbon emissions and economic growth in India. Findings – Cointegration result indicates the long-run equilibrium relationship between economic growth, energy consumption and carbon emissions. Further causality results suggest unidirectional causality running from energy consumption and carbon emissions to economic growth in long run, energy consumption to carbon emissions, carbon emissions to economic growth and economic growth to energy consumption in short run. Practical implications – There is urgent need of policy development toward boosting energy efficiency, developing alternative carbon-free energy sources like nuclear, renewables and expansion of affordable energy for faster, sustainable and more inclusive growth for India in upcoming years. Originality/value – India, an energy-dependent economy needs to effectively implement energy efficiency measures, super critical technologies in power plants, and investment in renewable energy resources in order to minimize the dependence on fossil fuels and carbon emissions for faster, more inclusive and sustainable growth.

The Relationship between Aggregated-Disaggregated Energy Consumption and Economic Growth in Turkey

“…Energy consumption explained 27% to 61% of the variation in Y, and Y explained 5% to 25% of the variation on energy consumption over an average 12-year period. This study reached the following conclusions: 1) a positive one-way causality runs from OC to Y, supporting the findings of Zou and Chau (2006), Bhattacharya and Bhattacharya (2014), Nasiru, Usman, and Saidu (2014), and Terzi and Pata (2016); 2) a positive one-way causality runs from EC to Y, supporting the findings of Altinay and Karagol (2005), Soytas and Sari (2007), Karagol, Erbaykal, and Ertugrul (2011), Polat, Uslu, and San (2011), Yuan, Kang, Zhao, and Hu (2008, and Lyke (2015); 3) a positive one-way causality runs from CO2 to Y, supporting the findings of Khan (2013) and Vidyarthi (2013); and 4) a positive one-way causality runs from PEC to Y, supporting the findings of Sari and Soytas (2004), Erbaykal (2007), Mucuk and Uysal (2009), Korkmaz and Yılgör (2011), Yanar andKerimoglu (2011), Lihn andLin (2014), Shaari, Hussain, and Rashid (2014), and Alshehry and Belloumi (2015).…”

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“…Sharma (2011) finds that besides per capita GDP, trade openness too causes CO2 emission. The relation between CO2 emission and energy use after globalisation in India mirrors EKC (Vidyarthi, 2013;Murthy, 2012). In India, carbon emission is highly elastic with respect to real per capita income and energy use (Shahbaz et al, 2014;Kanjilal et al, 2013).…”

Environmental impact of economic growth, emission and FDI: systematic review of reviews

“…Soytas and Sari (2009) observed unidirectional causality running from carbon emission to energy consumption and no causality between income and carbon emission, whereas Zhang and Cheng (2009) reported causality moving from energy consumption and economic output to carbon emission. Vidyarthi (2013) found a long-run relationship among the variables and indicated the association of carbon emission and energy consumption with economic growth. Ghosh (2010) found an ongoing association among carbon emission, energy consumption and income after controlling some variables of the model in dynamic modelling.…”