Advanced Search
MyIDEAS: Login

Coal Consumption, Industrial Production and CO2 Emissions in China and India

Contents:

Author Info

  • Sahbi Farhani
  • Muhammad Shahbaz
  • Ilhan Ozturk

Abstract

The present study explores the relationship between coal consumption, industrial production and CO2 emissions in case of China and India for the period of 1971-2011. The structural break unit root test and cointegrating approach have been applied. The direction of causal relationship between the variables is investigated by applying the VECM Granger causality test. Our results validate the presence of cointegration among the series in both countries. We also find the existence of inverted U-shaped curve between industrial production and CO2 emissions for India but for China it is U-shaped relationship. Coal consumption adds in CO2 emission. The causality analysis reveals that industrial production and coal consumption Granger cause CO2 emission in India. In case of China, the feedback effect exists between coal consumption and CO2 emissions. Due to the importance of coal in China and India, any reduction in coal consumption will negatively affect their economic growth as well as electricity supply.

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.ipag.fr/wp-content/uploads/recherche/WP/IPAG_WP_2014_225.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Research, Ipag Business School in its series Working Papers with number 2014-225.

as in new window
Length: 23 pages
Date of creation: 22 Apr 2014
Date of revision:
Handle: RePEc:ipg:wpaper:2014-225

Contact details of provider:
Postal: 184 Boulevard Saint-Germain, 75006 Paris
Phone: 33 1 53 63 36 00
Web page: http://www.ipag.fr
More information through EDIRC

Related research

Keywords: Coal consumption; Industrial production; CO2 emissions;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. Bayer, Christian & Hanck, Christoph, 2009. "Combining Non-Cointegration Tests," Research Memorandum 012, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  2. Muhammad, Shahbaz & Qazi Muhammad, Adnan Hye & Aviral Kumar, Tiwari, 2012. "Economic Growth, Energy Consumption, Financial Development, International Trade and CO2 Emissions in Indonesia," MPRA Paper 43294, University Library of Munich, Germany, revised 15 Dec 2012.
  3. 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.
  4. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2012. "Energy consumption, economic growth and CO2 emissions in Middle East and North African countries," Energy Policy, Elsevier, vol. 45(C), pages 342-349.
  5. Yuan, Jia-Hai & Kang, Jian-Gang & Zhao, Chang-Hong & Hu, Zhao-Guang, 2008. "Energy consumption and economic growth: Evidence from China at both aggregated and disaggregated levels," Energy Economics, Elsevier, vol. 30(6), pages 3077-3094, November.
  6. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
  7. Lee, Chien-Chiang & Chang, Chun-Ping, 2005. "Structural breaks, energy consumption, and economic growth revisited: Evidence from Taiwan," Energy Economics, Elsevier, vol. 27(6), pages 857-872, November.
  8. Jinke, Li & Hualing, Song & Dianming, Geng, 2008. "Causality relationship between coal consumption and GDP: Difference of major OECD and non-OECD countries," Applied Energy, Elsevier, vol. 85(6), pages 421-429, June.
  9. Apergis, Nicholas & Payne, James E., 2010. "Coal consumption and economic growth: Evidence from a panel of OECD countries," Energy Policy, Elsevier, vol. 38(3), pages 1353-1359, March.
  10. Baum, Christopher F., 2004. "A review of Stata 8.1 and its time series capabilities," International Journal of Forecasting, Elsevier, vol. 20(1), pages 151-161.
  11. Ravindra H Dholakia & Amey A Sapre, 2011. "Estimating Structural Breaks Endogenously in India's Post-Independence Growth Path: An Empirical Critique," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 73-87, July.
  12. 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.
  13. Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
  14. Ewing, Bradley T. & Sari, Ramazan & Soytas, Ugur, 2007. "Disaggregate energy consumption and industrial output in the United States," Energy Policy, Elsevier, vol. 35(2), pages 1274-1281, February.
  15. Pesavento, Elena, 2004. "Analytical evaluation of the power of tests for the absence of cointegration," Journal of Econometrics, Elsevier, vol. 122(2), pages 349-384, October.
  16. Apergis, Nicholas & Payne, James E., 2010. "The emissions, energy consumption, and growth nexus: Evidence from the commonwealth of independent states," Energy Policy, Elsevier, vol. 38(1), pages 650-655, January.
  17. Muhammad, Shahbaz & Mihai, Mutascu & Parvez, Azim, 2011. "Environmental Kuznets Curve in Romania and the Role of Energy Consumption," MPRA Paper 32254, University Library of Munich, Germany, revised 15 Jul 2011.
  18. Wolde-Rufael, Yemane, 2010. "Coal consumption and economic growth revisited," Applied Energy, Elsevier, vol. 87(1), pages 160-167, January.
  19. Jayanthakumaran, Kankesu & Verma, Reetu & Liu, Ying, 2012. "CO2 emissions, energy consumption, trade and income: A comparative analysis of China and India," Energy Policy, Elsevier, vol. 42(C), pages 450-460.
  20. Oguz Ocal & Ilhan Ozturk & Alper Aslan, 2013. "Coal Consumption and Economic Growth in Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 3(2), pages 193-198.
  21. Shahbaz, Muhammad & Ozturk, Ilhan & Afza, Talat & Ali, Amjad, 2013. "Revisiting the Environmental Kuznets Curve in a Global Economy," MPRA Paper 46610, University Library of Munich, Germany, revised 23 Apr 2013.
  22. Sari, Ramazan & Soytas, Ugur, 2004. "Disaggregate energy consumption, employment and income in Turkey," Energy Economics, Elsevier, vol. 26(3), pages 335-344, May.
  23. Peter Boswijk, H., 1994. "Testing for an unstable root in conditional and structural error correction models," Journal of Econometrics, Elsevier, vol. 63(1), pages 37-60, July.
  24. Fei, Li & Dong, Suocheng & Xue, Li & Liang, Quanxi & Yang, Wangzhou, 2011. "Energy consumption-economic growth relationship and carbon dioxide emissions in China," Energy Policy, Elsevier, vol. 39(2), pages 568-574, February.
  25. Clemente, Jesus & Montanes, Antonio & Reyes, Marcelo, 1998. "Testing for a unit root in variables with a double change in the mean," Economics Letters, Elsevier, vol. 59(2), pages 175-182, May.
  26. Graham Elliott & Michael Jansson & Elena Pesavento, 2003. "Optimal Power For Testing Potential Cointegrating Vectors with Known Parameters for Nonstationarity," Emory Economics 0303, Department of Economics, Emory University (Atlanta).
  27. Lean, Hooi Hooi & Smyth, Russell, 2010. "CO2 emissions, electricity consumption and output in ASEAN," Applied Energy, Elsevier, vol. 87(6), pages 1858-1864, June.
  28. Reynolds, Douglas B. & Kolodziej, Marek, 2008. "Former Soviet Union oil production and GDP decline: Granger causality and the multi-cycle Hubbert curve," Energy Economics, Elsevier, vol. 30(2), pages 271-289, March.
  29. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  30. 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.
  31. Tiwari, Aviral Kumar & Shahbaz, Muhammad & Adnan Hye, Qazi Muhammad, 2013. "The environmental Kuznets curve and the role of coal consumption in India: Cointegration and causality analysis in an open economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 519-527.
  32. Apergis, Nicholas & Payne, James E., 2009. "CO2 emissions, energy usage, and output in Central America," Energy Policy, Elsevier, vol. 37(8), pages 3282-3286, August.
  33. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-36, July.
  34. Ang, James B., 2007. "CO2 emissions, energy consumption, and output in France," Energy Policy, Elsevier, vol. 35(10), pages 4772-4778, October.
  35. 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.
  36. Ziramba, Emmanuel, 2009. "Disaggregate energy consumption and industrial production in South Africa," Energy Policy, Elsevier, vol. 37(6), pages 2214-2220, June.
  37. Yoo, Seung-Hoon, 2006. "Causal relationship between coal consumption and economic growth in Korea," Applied Energy, Elsevier, vol. 83(11), pages 1181-1189, November.
  38. Aviral Kumar Tiwari & Muhammad Shahbaz, 2013. "Does Defence Spending Stimulate Economic Growth In India? A Revisit," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(4), pages 371-395, August.
  39. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2012. "Coal consumption, CO2 emission and economic growth in China: Empirical evidence and policy responses," Energy Economics, Elsevier, vol. 34(2), pages 518-528.
  40. Chang, Ching-Chih, 2010. "A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China," Applied Energy, Elsevier, vol. 87(11), pages 3533-3537, November.
  41. Li, Raymond & Leung, Guy C.K., 2012. "Coal consumption and economic growth in China," Energy Policy, Elsevier, vol. 40(C), pages 438-443.
  42. Apergis, Nicholas & Payne, James E., 2010. "The causal dynamics between coal consumption and growth: Evidence from emerging market economies," Applied Energy, Elsevier, vol. 87(6), pages 1972-1977, June.
  43. 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.
  44. 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.
  45. Ghosh, Sajal, 2010. "Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach," Energy Policy, Elsevier, vol. 38(6), pages 3008-3014, June.
  46. Madhusudan Datta, 2011. "How Real are the Changes in Sectoral GDP Shares in the Indian Economy?," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(1), pages 169-182.
Full references (including those not matched with items on IDEAS)

Citations

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:ipg:wpaper:2014-225. 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: (Ingmar Schumacher).

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.