Nexus of Energy Consumption, C02 Emission and Economic Growth in India: Evidence from Toda & Yamamoto Granger Non-Causality Approach

摘要

The present study investigated the output, energy and pollution nexus hypothesis in the context of India. The study used the annual time series data for the period 1970-2010. The empirical findings of the study show that there is a high pairwise correlation exist between energy consumption and economic growth. The cointegration result suggests that there is a long-run equilibrium relationship exist between energy consumption, economic growth and C02 emissions. The vector error correction result showsa positive and significant impact of energy consumption on CO2 emission. The result also reveals that economic growth has a positive and significant impact on energy consumption. Due to 1% increase in economic growth, it will increase the energy consumption 60% at the 5% level of significance. The Toda-Yamamoto Granger causality result indicates there is unidirectional causality running from energy consumption to carbon emission and economic growth to carbon emission.