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The environmental Kuzents Curve and the role of coal consumption in India: cointegration and causality analysis in an open economy

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  • Tiwari, Aviral Kumar
  • Muhammad, Shahbaz

Abstract

This study investigates the dynamic relationship between coal consumption, economic growth, trade openness and CO2 emissions for Indian economy. In doing so, Narayan and Pop structural break unit test is applied to test the order of integration of the variables. Long run relationship between the variables is tested by applying ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001). The results confirm the existence of cointegration for long run between coal consumption, economic growth, trade openness and CO2 emissions. Our empirical exercise indicates the presence of Environmental Kuznets Curve (EKC) long run as well as short run. Coal consumption as well as trade openness contributes to CO2 emissions. The causality results report the feedback hypothesis between economic growth and CO2 emissions and same inference is drawn between coal consumption and CO2 emissions. Moreover, trade openness Granger causes economic growth, coal consumption and CO2 emissions.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37775.

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Date of creation: 18 Mar 2012
Date of revision: 31 Mar 2012
Handle: RePEc:pra:mprapa:37775

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Keywords: Energy; Growth; Emissions; EKC;

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Citations

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Cited by:
  1. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Mahmood, Haider & Arouri, Mohamed, 2013. "Does financial development reduce CO2 emissions in Malaysian economy? A time series analysis," Economic Modelling, Elsevier, vol. 35(C), pages 145-152.
  2. 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.
  3. Shahbaz, Muhammad, 2013. "Does financial instability increase environmental degradation? Fresh evidence from Pakistan," Economic Modelling, Elsevier, vol. 33(C), pages 537-544.
  4. Alkhathlan, Khalid & Javid, Muhammad, 2013. "Energy consumption, carbon emissions and economic growth in Saudi Arabia: An aggregate and disaggregate analysis," Energy Policy, Elsevier, vol. 62(C), pages 1525-1532.
  5. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid, 2013. "What is MENA Region Initially Needed: Grow Output or Mitigate CO2 Emissions?," MPRA Paper 48859, University Library of Munich, Germany, revised 05 Aug 2013.
  6. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid & Chaibi, Anissa, 2014. "What does MENA region initially need: Grow output or mitigate CO2 emissions?," Economic Modelling, Elsevier, vol. 38(C), pages 270-281.
  7. 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.
  8. Sahbi Farhani & Muhammad Shahbaz & Ilhan Ozturk, 2014. "Coal Consumption, Industrial Production and CO2 Emissions in China and India," Working Papers 2014-225, Department of Research, Ipag Business School.
  9. 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.
  10. Farhani, Sahbi & Shahbaz, Muhammad & AROURI, Mohamed El Hedi, 2013. "Panel analysis of CO2 emissions, GDP, energy consumption, trade openness and urbanization for MENA countries," MPRA Paper 49258, University Library of Munich, Germany, revised 20 Aug 2013.

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