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Low-carbon growth for Indian iron and steel sector: exploring the role of voluntary environmental compliance

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  • Prasad, Mousami
  • Mishra, Trupti

Abstract

India's move towards low-carbon growth will be successful only when the industries assume responsibilities of climate change. Previous studies argue that voluntary compliance by firms being business-led initiative is appropriate for developing nations, however provides little empirical evidence. The present study investigates the role of voluntary compliance in improving firms’ environmental performance in Indian iron and steel sector using sample of 76 firms over years 2006–07 to 2011–12. Environmental performance is measured by CO2 emissions. In absence of emission data at firm level, we quantify CO2 emissions from energy consumption using Intergovernmental Panel on Climate Change (IPCC) reference approach. Voluntary compliance is indicated by presence of voluntary environmental management standards - ISO 14001. The study finds that 33% of sample firms comply with ISO 14001. Further, the empirical results based on panel data econometric suggests that there is a significant positive relationship between voluntary compliance and improvement in environmental performance, even after addressing simultaneity issues and including other firm characteristics. Thus, voluntary compliance may be used as supplementary policy tool to achieve low carbon growth in industries. Additionally, there is a need to disseminate information about ISO 14001 by government as well as firms to create awareness.

Suggested Citation

  • Prasad, Mousami & Mishra, Trupti, 2017. "Low-carbon growth for Indian iron and steel sector: exploring the role of voluntary environmental compliance," Energy Policy, Elsevier, vol. 100(C), pages 41-50.
    • Handle: RePEc:eee:enepol:v:100:y:2017:i:c:p:41-50
    DOI: 10.1016/j.enpol.2016.09.060
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    1. Sun, Chuanwang & Ding, Dan & Yang, Mian, 2017. "Estimating the complete CO2 emissions and the carbon intensity in India: From the carbon transfer perspective," Energy Policy, Elsevier, vol. 109(C), pages 418-427.
    2. Haider, Salman & Mishra, Prajna Paramita, 2021. "Does innovative capability enhance the energy efficiency of Indian Iron and Steel firms? A Bayesian stochastic frontier analysis," Energy Economics, Elsevier, vol. 95(C).
    3. Wang, Jian & Sun, Furong & Lv, Kangjuan & Wang, Lisha, 2022. "Industrial agglomeration and firm energy intensity: How important is spatial proximity?," Energy Economics, Elsevier, vol. 112(C).
    4. Haider, Salman & Danish, Mohd Shadab & Sharma, Ruchi, 2019. "Assessing energy efficiency of Indian paper industry and influencing factors: A slack-based firm-level analysis," Energy Economics, Elsevier, vol. 81(C), pages 454-464.
    5. Yang Zhang & Xinxin Zhang, 2022. "The Threshold Effect of Executive Compensation on Corporate Environmental Responsibility: Based on the Moderating Effect of Industry Competition," Sustainability, MDPI, vol. 14(14), pages 1-24, July.
    6. Artitzar Erauskin‐Tolosa & Eugenio Zubeltzu‐Jaka & Iñaki Heras‐Saizarbitoria & Olivier Boiral, 2020. "ISO 14001, EMAS and environmental performance: A meta‐analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1145-1159, March.
    7. Moya, Diego & Budinis, Sara & Giarola, Sara & Hawkes, Adam, 2020. "Agent-based scenarios comparison for assessing fuel-switching investment in long-term energy transitions of the India’s industry sector," Applied Energy, Elsevier, vol. 274(C).

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