Energy consumption, carbon emissions and economic growth in India

Publication Date04 Oct 2013
AuthorHarishankar Vidyarthi
SubjectPublic policy & environmental management,Environmental technology & innovation
Energy consumption, carbon
emissions and economic growth
in India
Harishankar Vidyarthi
Department of Management Studies,
National Institute of Financial Management, Faridabad, India
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 shor t- 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 r un,
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 energ y
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.
Keywords Development, Climate change, Sustainable environment
Paper type Research paper
1. Introduction
Greenhouse gas (GHG) emissions especially carbon dioxide emissions through the
combustion of fossils fuels, isa major cause of global war ming, imposing serious threat
to the environment and human life. Acting on this concern, international communities
through Kyoto Protocol in 1997 call for reduction of GHG emissions in 37 industrialized
countries and European community to 5.20 percent lower than 1990 level during 2008-2012.
However, Kyoto Protocol does require monitoring and reporting GHG emissions
without reducing GHG emissions for developing economies including India and
further notified by Doha conference 2012. The issues of climate c hange is very critical
for developing economies like India which uses mainly fossils fuels[1] (nearly 89.80
percent of gross energy consumption) to meet its energy demand. About 400 million
people (almost 34.50 percent of population) do not have access of electricity and
836 million people (almost 72 percent of population) dep end upon traditional biomass
for cooking (International Energy Agency, 2012) in India. India’s per capita energy
consumption (585 kilograms of oil equivalent) is still less than one third of world’s
average (1,802 kilograms of oil equivalent per capita in year 2010). Thus India’s energy
consumption[2] is expected to increase steadily in the coming years to meet the
The current issue and full text archive of this journal is available at
WorldJour nal of Science, Technology
and Sustainable Development
Vol. 10 No. 4, 2013
pp. 278-287
rEmeraldGroup PublishingLimited
DOI 10.1108/W JSTSD-07-2013-0024

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