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Energy Savings Potential and Policy for Energy Conservation in Selected Indian Manufacturing Industries

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  • Manish Gupta
  • Ramprasad Sengupta

Abstract

Minimisation of damage from the rising trend of global warming would warrant two kinds of action for a country like India: (i) abatement of Green House Gas (GHG) emissions, (ii) adaptation to climate change to reduce climate change related vulnerability of the people. The target of low-carbon economic growth in terms of declining energy and carbon intensity of gross domestic product (GDP) assumes special significance in such context. Industrial sector being the largest consumer of energy in India, the article estimates energy savings potential of major energy consuming industries using unit-level data for 2007–08. It further develops an econometric model admitting substitutability among energy and non-energy inputs and between different fuels for selected industries to study their behavioural response to changes in input prices and suggest policy instruments for conserving energy using time series data for post economic reform period 1991–92 to 2008–09. The results point mostly to the significant response of energy consumption to own price increases and to the insignificance of the responsiveness of corresponding capital requirement to effect such energy conservation. Besides, a large part of the growth of factor productivity as estimated by the model has been found to be induced by energy price changes, price neutral component of technical change being negligible.

Suggested Citation

  • Manish Gupta & Ramprasad Sengupta, 2013. "Energy Savings Potential and Policy for Energy Conservation in Selected Indian Manufacturing Industries," Review of Market Integration, India Development Foundation, vol. 5(3), pages 363-388, December.
    • Handle: RePEc:sae:revmar:v:5:y:2013:i:3:p:363-388
    DOI: 10.1177/0974929214538361
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    Cited by:

    1. Swapan Chakraborty, 2021. "Labour Market Regulation and Manufacturing Employment: A Study of Organized Manufacturing Sector Across Indian States," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 1-22, March.
    2. Oak, Hena & Bansal, Sangeeta, 2022. "Enhancing energy efficiency of Indian industries: Effectiveness of PAT scheme," Energy Economics, Elsevier, vol. 113(C).
    3. Bishwanath Goldar & Yashobanta Parida & Deepika Sehdev, 2017. "Reduction in Carbon Emissions Intensity and Impact on Export Competitiveness: Evidence from Indian Manufacturing Firms," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-30, June.
    4. Mehmood Mirza, Faisal & Bergland, Olvar & Afzal, Naila, 2014. "Electricity conservation policies and sectorial output in Pakistan: An empirical analysis," Energy Policy, Elsevier, vol. 73(C), pages 757-766.
    5. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2014. "Spatial dynamics of electricity usage in India," Policy Research Working Paper Series 7055, The World Bank.
    6. Bishwanath Goldar, 2013. "Energy Use Efficiency of India’s Organised Manufacturing," Review of Market Integration, India Development Foundation, vol. 5(2), pages 131-154, August.

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    More about this item

    Keywords

    Energy conservation; derived demand; elasticity;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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