Advanced Search
MyIDEAS: Login to save this article or follow this journal

Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach

Contents:

Author Info

  • Ghosh, Sajal
Registered author(s):

    Abstract

    The study probes cointegration and causality between carbon emissions and economic growth for India using ARDL bounds testing approach complemented by Johansen-Juselius maximum likelihood procedure in a multivariate framework by incorporating energy supply, investment and employment for time span 1971-2006. The study fails to establish long-run equilibrium relationship and long term causality between carbon emissions and economic growth; however, there exists a bi-directional short-run causality between the two. Hence, in the short-run, any effort to reduce carbon emissions could lead to a fall in the national income. This study also establishes unidirectional short-run causality running from economic growth to energy supply and energy supply to carbon emissions. The absence of causality running from energy supply to economic growth implies that in India, energy conservation and energy efficiency measures can be implemented to minimize the wastage of energy across value chain. Such measures would narrow energy demand-supply gap. Absence of long-run causality between carbon emissions and economic growth implies that in the long-run, focus should be given on harnessing energy from clean sources to curb carbon emissions, which would not affect the country's economic growth.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6V2W-4YD9XFK-1/2/709884745cbe8ba4e84a670331480153
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 38 (2010)
    Issue (Month): 6 (June)
    Pages: 3008-3014

    as in new window
    Handle: RePEc:eee:enepol:v:38:y:2010:i:6:p:3008-3014

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Causality Carbon emission India;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Narayan, Paresh Kumar & Narayan, Seema & Smyth, Russell, 2008. "Are oil shocks permanent or temporary? Panel data evidence from crude oil and NGL production in 60 countries," Energy Economics, Elsevier, vol. 30(3), pages 919-936, May.
    2. Stephen P. A. Brown & Mine K. Yücel, 2001. "Energy prices and aggregate economic activity: an interpretive survey," Working Papers 0102, Federal Reserve Bank of Dallas.
    3. Jalil, Abdul & Mahmud, Syed F., 2009. "Environment Kuznets curve for CO2 emissions: A cointegration analysis for China," Energy Policy, Elsevier, vol. 37(12), pages 5167-5172, December.
    4. Mark Heil & Thomas Selden, 1999. "Panel stationarity with structural breaks: carbon emissions and GDP," Applied Economics Letters, Taylor & Francis Journals, vol. 6(4), pages 223-225.
    5. Friedl, Birgit & Getzner, Michael, 2003. "Determinants of CO2 emissions in a small open economy," Ecological Economics, Elsevier, vol. 45(1), pages 133-148, April.
    6. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    7. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
    8. Ghosh, Sajal, 2009. "Import demand of crude oil and economic growth: Evidence from India," Energy Policy, Elsevier, vol. 37(2), pages 699-702, February.
    9. Halicioglu, Ferda, 2008. "An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey," MPRA Paper 11457, University Library of Munich, Germany.
    10. Apergis, Nicholas & Payne, James E., 2009. "Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model," Energy Economics, Elsevier, vol. 31(2), pages 211-216.
    11. Soytas, Ugur & Sari, Ramazan & Ewing, Bradley T., 2007. "Energy consumption, income, and carbon emissions in the United States," Ecological Economics, Elsevier, vol. 62(3-4), pages 482-489, May.
    12. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    13. Wolde-Rufael, Yemane, 2009. "Energy consumption and economic growth: The experience of African countries revisited," Energy Economics, Elsevier, vol. 31(2), pages 217-224.
    14. Paresh Kumar Narayan & Russell Smyth, 2005. "Are Shocks To Energy Consumption Permanent Or Temporary? Evidence From 182 Countries," Development Research Unit Working Paper Series 06/05, Monash University, Department of Economics.
    15. Ghali, Khalifa H. & El-Sakka, M. I. T., 2004. "Energy use and output growth in Canada: a multivariate cointegration analysis," Energy Economics, Elsevier, vol. 26(2), pages 225-238, March.
    16. David I. Stern, 2003. "The Rise and Fall of the Environmental Kuznets Curve," Rensselaer Working Papers in Economics 0302, Rensselaer Polytechnic Institute, Department of Economics.
    17. Soytas, Ugur & Sari, Ramazan, 2009. "Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member," Ecological Economics, Elsevier, vol. 68(6), pages 1667-1675, April.
    18. Liang, Qi & Cao, Hua, 2007. "Property prices and bank lending in China," Journal of Asian Economics, Elsevier, vol. 18(1), pages 63-75, February.
    19. Lee, Chien-Chiang, 2006. "The causality relationship between energy consumption and GDP in G-11 countries revisited," Energy Policy, Elsevier, vol. 34(9), pages 1086-1093, June.
    20. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
    21. Coondoo, Dipankor & Dinda, Soumyananda, 2008. "Carbon dioxide emission and income: A temporal analysis of cross-country distributional patterns," Ecological Economics, Elsevier, vol. 65(2), pages 375-385, April.
    22. Dinda, Soumyananda & Coondoo, Dipankor, 2001. "Income and Emission: A Panel Data based Cointegration Analysis," MPRA Paper 50591, University Library of Munich, Germany, revised 10 Mar 2003.
    23. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    24. Yu, Eden S. H. & Hwang, Been-Kwei, 1984. "The relationship between energy and GNP : Further results," Energy Economics, Elsevier, vol. 6(3), pages 186-190, July.
    25. AkbostancI, Elif & Türüt-AsIk, Serap & Tunç, G. Ipek, 2009. "The relationship between income and environment in Turkey: Is there an environmental Kuznets curve?," Energy Policy, Elsevier, vol. 37(3), pages 861-867, March.
    26. Stern, David I., 2000. "A multivariate cointegration analysis of the role of energy in the US macroeconomy," Energy Economics, Elsevier, vol. 22(2), pages 267-283, April.
    27. Lee, Chien-Chiang, 2005. "Energy consumption and GDP in developing countries: A cointegrated panel analysis," Energy Economics, Elsevier, vol. 27(3), pages 415-427, May.
    28. Romero-Avila, Diego, 2008. "Questioning the empirical basis of the environmental Kuznets curve for CO2: New evidence from a panel stationarity test robust to multiple breaks and cross-dependence," Ecological Economics, Elsevier, vol. 64(3), pages 559-574, January.
    29. McNeil, Michael A. & Iyer, Maithili & Meyers, Stephen & Letschert, Virginie E. & McMahon, James E., 2008. "Potential benefits from improved energy efficiency of key electrical products: The case of India," Energy Policy, Elsevier, vol. 36(9), pages 3467-3476, September.
    30. Ang, James B., 2008. "Economic development, pollutant emissions and energy consumption in Malaysia," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 271-278.
    31. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    32. Managi, Shunsuke & Jena, Pradyot Ranjan, 2008. "Environmental productivity and Kuznets curve in India," Ecological Economics, Elsevier, vol. 65(2), pages 432-440, April.
    33. Bhattacharya, B.B. & Bhanumurthy, N.R. & Mallick, Hrushikesh, 2008. "Modeling interest rate cycles in India," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 899-915.
    34. Altinay, Galip & Karagol, Erdal, 2004. "Structural break, unit root, and the causality between energy consumption and GDP in Turkey," Energy Economics, Elsevier, vol. 26(6), pages 985-994, November.
    35. Soytas, Ugur & Sari, Ramazan, 2006. "Energy consumption and income in G-7 countries," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 739-750, October.
    36. Enisan, Akinlo A. & Olufisayo, Akinlo O., 2009. "Stock market development and economic growth: Evidence from seven sub-Sahara African countries," Journal of Economics and Business, Elsevier, vol. 61(2), pages 162-171.
    37. Soytas, Ugur & Sari, Ramazan, 2003. "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets," Energy Economics, Elsevier, vol. 25(1), pages 33-37, January.
    38. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    39. Tang, Chor Foon & Lean, Hooi Hooi, 2009. "New evidence from the misery index in the crime function," Economics Letters, Elsevier, vol. 102(2), pages 112-115, February.
    40. Akinlo, A. Enisan, 2006. "The stability of money demand in Nigeria: An autoregressive distributed lag approach," Journal of Policy Modeling, Elsevier, vol. 28(4), pages 445-452, May.
    41. Oh, Wankeun & Lee, Kihoon, 2004. "Causal relationship between energy consumption and GDP revisited: the case of Korea 1970-1999," Energy Economics, Elsevier, vol. 26(1), pages 51-59, January.
    42. Paresh Kumar Narayan & Russell Smyth, 2006. "Higher Education, Real Income and Real Investment in China: Evidence From Granger Causality Tests," Education Economics, Taylor & Francis Journals, vol. 14(1), pages 107-125.
    43. Sari, Ramazan & Soytas, Ugur, 2009. "Are global warming and economic growth compatible? Evidence from five OPEC countries?," Applied Energy, Elsevier, vol. 86(10), pages 1887-1893, October.
    44. Bentzen, Jan & Engsted, Tom, 1993. "Short- and long-run elasticities in energy demand : A cointegration approach," Energy Economics, Elsevier, vol. 15(1), pages 9-16, January.
    45. Zhang, Xing-Ping & Cheng, Xiao-Mei, 2009. "Energy consumption, carbon emissions, and economic growth in China," Ecological Economics, Elsevier, vol. 68(10), pages 2706-2712, August.
    46. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
    47. Stern, David I., 1993. "Energy and economic growth in the USA : A multivariate approach," Energy Economics, Elsevier, vol. 15(2), pages 137-150, April.
    48. Narayan, Paresh Kumar & Smyth, Russell, 2005. "Electricity consumption, employment and real income in Australia evidence from multivariate Granger causality tests," Energy Policy, Elsevier, vol. 33(9), pages 1109-1116, June.
    49. Akinlo, A.E., 2008. "Energy consumption and economic growth: Evidence from 11 Sub-Sahara African countries," Energy Economics, Elsevier, vol. 30(5), pages 2391-2400, September.
    50. Glasure, Yong U. & Lee, Aie-Rie, 1998. "Cointegration, error-correction, and the relationship between GDP and energy: The case of South Korea and Singapore," Resource and Energy Economics, Elsevier, vol. 20(1), pages 17-25, March.
    51. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Yang, Zihui & Zhao, Yongliang, 2014. "Energy consumption, carbon emissions, and economic growth in India: Evidence from directed acyclic graphs," Economic Modelling, Elsevier, vol. 38(C), pages 533-540.
    2. Shahbaz, Muhammad & Lean, Hooi Hooi & Shabbir, Muhammad Shahbaz, 2012. "Environmental Kuznets Curve hypothesis in Pakistan: Cointegration and Granger causality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2947-2953.
    3. Chandran Govindaraju, V.G.R. & Tang, Chor Foon, 2013. "The dynamic links between CO2 emissions, economic growth and coal consumption in China and India," Applied Energy, Elsevier, vol. 104(C), pages 310-318.
    4. A. Nurul Hossain & Syed Hasanuzzaman, 2013. "Remittances and investment nexus in Bangladesh: an ARDL bounds testing approach," International Review of Economics, Springer, vol. 60(4), pages 387-407, December.
    5. Ibrahim, Mansor H. & Law, Siong Hook, 2014. "Social capital and CO2 emission—output relations: A panel analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 528-534.
    6. Mohamed Amine Boutabba, 2013. "The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy," Documents de recherche 13-05, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    7. Shahbaz, Muhammad & Kumar Tiwari, Aviral & Nasir, Muhammad, 2013. "The effects of financial development, economic growth, coal consumption and trade openness on CO2 emissions in South Africa," Energy Policy, Elsevier, vol. 61(C), pages 1452-1459.
    8. Hocaoglu, Fatih Onur & Karanfil, Fatih, 2011. "Examining the link between carbon dioxide emissions and the share of industry in GDP: Modeling and testing for the G-7 countries," Energy Policy, Elsevier, vol. 39(6), pages 3612-3620, June.
    9. Omri, Anis & Kahouli, Bassem, 2014. "Causal relationships between energy consumption, foreign direct investment and economic growth: Fresh evidence from dynamic simultaneous-equations models," Energy Policy, Elsevier, vol. 67(C), pages 913-922.
    10. Ozcan, Burcu, 2013. "The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis," Energy Policy, Elsevier, vol. 62(C), pages 1138-1147.
    11. Sahbi Farhani & Jaleleddine Ben Rejeb, 2012. "Energy Consumption, Economic Growth and CO2 Emissions: Evidence from Panel Data for MENA Region," International Journal of Energy Economics and Policy, Econjournals, vol. 2(2), pages 71-81.
    12. Mohamed Arouri & Muhammad Shahbaz & Rattapon Onchang & Faridul Islam & Frédéric Teulon, 2014. "Environmental Kuznets Curve in Thailand: Cointegration and Causality Analysis," Working Papers 2014-204, Department of Research, Ipag Business School.
    13. Bouoiyour, Jamal & Selmi, Refk, 2012. "Electricity consumption and economic growth nexus: Evidence from MENA countries," MPRA Paper 49136, University Library of Munich, Germany, revised Nov 2012.
    14. Alam, Mohammad Jahangir & Begum, Ismat Ara & Buysse, Jeroen & Rahman, Sanzidur & Van Huylenbroeck, Guido, 2011. "Dynamic modeling of causal relationship between energy consumption, CO2 emissions and economic growth in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 3243-3251, August.
    15. Zaman, Khalid & Mushtaq Khan, Muhammad & Ahmad, Mehboob, 2013. "Factors affecting commercial energy consumption in Pakistan: Progress in energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 107-135.
    16. Shahbaz, Muhammad & Farhani, Sahbi & Ozturk, Ilhan, 2013. "Coal Consumption, Industrial Production and CO2 Emissions in China and India," MPRA Paper 50618, University Library of Munich, Germany, revised 12 Oct 2013.
    17. Shanthini, Rajaratnam, 2007. "Fossil fuel based CO2 emissions, economic growth, and world crude oil price nexus in the United States," MPRA Paper 29574, University Library of Munich, Germany, revised 19 Feb 2011.
    18. Islam, Faridul & Shahbaz, Muhammad & Alam, Mahmudul, 2011. "Financial development and energy consumption nexus in Malaysia: A multivariate time series analysis," MPRA Paper 28403, University Library of Munich, Germany.
    19. Omri, Anis, 2013. "CO2 emissions, energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models," Energy Economics, Elsevier, vol. 40(C), pages 657-664.
    20. Wang, S.S. & Zhou, D.Q. & Zhou, P. & Wang, Q.W., 2011. "CO2 emissions, energy consumption and economic growth in China: A panel data analysis," Energy Policy, Elsevier, vol. 39(9), pages 4870-4875, September.
    21. Kanjilal, Kakali & Ghosh, Sajal, 2013. "Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks," Energy Policy, Elsevier, vol. 56(C), pages 509-515.
    22. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.
    23. Muhammad, Anees & Ishfaq, Ahmed, 2011. "Industrial development, agricultural growth, urbanization and environmental Kuznets curve in Pakistan," MPRA Paper 33469, University Library of Munich, Germany.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:6:p:3008-3014. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.