Economic Growth, Coal Demand, Carbon Dioxide Emissions: Empirical Findings from India with Policy Implications

Mita Bhattacharya, Hooi Hooi Lean () and Sankar Bhattacharya

No 47-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Coal is the primary source of energy and predominantly used for electricity generation in India. For an emerging economy like India, the demand-supply gap is widening in Coal sector with economic growth. Considering both sides of market, we establish long run dynamics between economic growth, coal demand and carbon dioxide (CO2) emissions. Unidirectional causality is found between growth and CO2 emissions, and bi-directional causality between GDP and coal consumption. Elasticity of coal consumption with respect to economic growth increases from 0.205 to 0.631 from short to long run; while elasticity of CO2 emissions with respect to coal consumption decreases from 0.915 to 0.148 from short to long run. In increasing demand environment, we suggest more investment in cleaner coal technologies, reducing regulatory constraints in the coal sector, and exploring alternative sources of energy will help India for energy security and sustainable development in the long run.

Keywords: India; Coal Consumption; CO2 Emissions; Economic Growth; Cleaner Coal Technology (search for similar items in EconPapers)
JEL-codes: Q43 Q48 Q56 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2014-10
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (2)

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