Energy consumption, carbon emissions and economic growth in India

Purpose - The purpose of this paper is to empirically examine the long run and causal relationship between energy consumption, carbon emissions and economic growth in India over the period 1971-2009 within multivariate framework. Design/methodology/approach - The study uses the Johansen cointegration test to examine the possible long-run equilibrium relationship followed by Granger causality test based on vector error correction model to explore short-and long-run causality between energy consumption, carbon emissions and economic growth in India. Findings - Cointegration result indicates the long-run equilibrium relationship between economic growth, energy consumption and carbon emissions. Further causality results suggest unidirectional causality running from energy consumption and carbon emissions to economic growth in long run, energy consumption to carbon emissions, carbon emissions to economic growth and economic growth to energy consumption in short run. Practical implications - There is urgent need of policy development toward boosting energy efficiency, developing alternative carbon-free energy sources like nuclear, renewables and expansion of affordable energy for faster, sustainable and more inclusive growth for India in upcoming years. Originality/value - India, an energy-dependent economy needs to effectively implement energy efficiency measures, super critical technologies in power plants, and investment in renewable energy resources in order tominimize the dependence on fossil fuels and carbon emissions for faster, more inclusive and sustainable growth.