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Primary Energy Consumption, CO2 Emissions and Economic Growth: Evidence from India

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  • Tiwari Aviral

    (Faculty of Applied Economics, Faculty of Management, ICFAI University Tripura)

Abstract

This study examined static and dynamic causal relationships between primary energy consumption, gross domestic product, and CO2 emissions for India during the period 1970-2007. We tested for the presence of unit root and cointegration among the variables by incorporating endogenously determined structural breaks in the data. The causality is examined between test variables using Granger's approach (in VAR framework), and Dolado and Lütkepohl's approach. We find evidence of no cointegration relationship among the test variables in the presence of structural breaks. Further, static analysis shows that primary energy consumption does not granger-cause GDP, whereas GDP granger-causes primary energy consumption. The dynamic analysis shows conflicting results on the causal relationship between energy consumption and GDP. Since GDP explains 75.9% of the forecast error variance of primary energy consumption, whereas primary energy consumption explains only 0.96% of the forecast error variance of GDP, we can suggest that India should adopt policies that reduce energy consumption.

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Bibliographic Info

Article provided by De Gruyter Open in its journal South East European Journal of Economics and Business.

Volume (Year): 6 (2011)
Issue (Month): 2 (November)
Pages: 99-117

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Handle: RePEc:vrs:seejeb:v:6:y:2011:i:2:p:99-117:n:9

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Web page: http://www.degruyteropen.com

Related research

Keywords: CO2 emissions; primary energy consumption; economic growth; causality; IRFs; VDs; structural breaks;

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Cited by:
  1. Muhammad, Shahbaz & Naceur, Khraief & Gazi Salah, Uddin, 2012. "Environmental Kuznets Curve in an Open Economy: A Bounds Testing and Causality Analysis for Tunisia," MPRA Paper 42706, University Library of Munich, Germany, revised 15 Nov 2012.
  2. Aviral Kumar Tiwari, 2011. "A structural VAR analysis of renewable energy consumption, real GDP and CO2 emissions: Evidence from India," Economics Bulletin, AccessEcon, vol. 31(2), pages 1793-1806.
  3. Md. Al Mamun & Kazi Sohag & Md. Abdul Hannan Mia & Gazi Salah Uddin & Ilhan Ozturk, 2014. "Regional Differences in the Dynamic Linkage between CO2 Emissions, Sectoral Output and Economic Growth," Working Papers 2014-141, Department of Research, Ipag Business School.
  4. Shahbaz, Muhammad & Salah Uddin, Gazi & Ur Rehman, Ijaz & Imran, Kashif, 2014. "Industrialization, electricity consumption and CO2 emissions in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 575-586.
  5. Mohammed I Shuaibu & Mutiu A Oyinlola, 2013. "Do structural breaks matter in the growth-environment nexus in Nigeria?," Economics Bulletin, AccessEcon, vol. 33(4), pages 2982-2994.
  6. Chibueze, E. Nnaji & Jude, O. Chukwu & Nnaji Moses, 2013. "Electricity Supply, Fossil fuel Consumption, Co2 Emissions and Economic Growth: Implications and Policy Options for Sustainable Development in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 3(3), pages 262-271.
  7. Shahbaz, Muhammad & Sbia, Rashid & Hamdi, Helmi, 2013. "The Environmental cost of Skiing in the Desert? Evidence from Cointegration with unknown Structural breaks in UAE," MPRA Paper 48007, University Library of Munich, Germany, revised 03 Jul 2013.
  8. Aviral Kumar TIWARI, 2011. "Energy Consumption, Co2 Emission and Economic Growth: A Revisit of the Evidence from India," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
  9. Shahbaz, Muhammad & Zeshan, Muhammad & Tiwari, Aviral Kumar, 2011. "Analysis of renewable and nonrenewable energy consumption, real GDP and CO2 emissions: A structural VAR approach in Romania," MPRA Paper 34066, University Library of Munich, Germany, revised 10 Oct 2011.
  10. Aviral Kumar Tiwari, 2011. "Comparative performance of renewable and nonrenewable energy source on economic growth and CO2 emissions of Europe and Eurasian countries: A PVAR approach," Economics Bulletin, AccessEcon, vol. 31(3), pages 2356-2372.

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