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Fuel substitution and environmental sustainability in India: Perspectives of technical progress

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  • Lin, Boqiang
  • Zhu, Runqing
  • Raza, Muhammad Yousaf

Abstract

India is the world's third-biggest carbon-emitter after China and the United States. Most of the mixed energy has been dominated by oil, coal, electricity, and gas. This study has attempted to investigate the output elasticities, the possibility of factors substitution, and technological progress between energy and non-energy factors. Ridge regression has been employed to investigate the parameters because of multicollinearity issue in the data. The outcomes illustrate that all energy inputs are substitutes. Gas contributes to only a small proportion of energy, while gas, oil and electricity replace coal in the production process. This will provide the opportunity to substitute coal gas-emitting with renewable energy resources without any risk. Maximum substitution between coal-gas and coal-electricity is found, with lower possibilities to replace coal for oil. The results support that lessening the coal for electricity provides the potential for primary interest. Moreover, the outcomes evidence that the significant role of coal in India converges over future, although slowly. Though, the technological progress is measured to be between −0.0076 and +0.053 among the different input pairs with capital as superior technical progress to energy and labor, which can meet anytime and substitute over time. Finally, these results have broader implications for energy conservation, energy substitution, capital enhancement, and carbon reduction policies in emerging nations. Furthermore, by analyzing technical progress, insights are provided on future carbon mitigation.

Suggested Citation

  • Lin, Boqiang & Zhu, Runqing & Raza, Muhammad Yousaf, 2022. "Fuel substitution and environmental sustainability in India: Perspectives of technical progress," Energy, Elsevier, vol. 261(PB).
    • Handle: RePEc:eee:energy:v:261:y:2022:i:pb:s0360544222021934
    DOI: 10.1016/j.energy.2022.125309
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