Emission-decoupling accounting framework of the Environmental Kuznets Curve (EKC) for India with structurally decomposed production and consumption based drivers

Abstract

PurposeThe study attempts to capture the comprehensive accounting framework of the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis relevant for an emerging economy based on an emission-growth decoupling approach. The paper intends to re-examine and analyze the roles of influential production- and consumption-based drivers for the prominently observable increasing pattern of the energy-related carbon dioxide (CO2) emissions from the Indian Territory.Design/methodology/approachThe study adopted an annual time series structural decomposition analysis (SDA) based on a single-country input-output framework for the period 2000–2014 to identify and elaborate the contribution of the responsible drivers to the production-based carbon emission of India. The study further proceeded to analyze a decoupling index to explore the features of economic growth and carbon emissions comovement over time.FindingsThe results from the empirical exercise reflect a pattern of consistently developing relative decoupling character for most of the production-based drivers. The paper produces insightful results on the pattern of energy-related CO2 emissions from the perspective of the EKC hypothesis and highlights the importance of consumption-based drivers as substantial contributors to the economy-wide CO2 emissions to be controlled for effective decoupling of the aggregate production-based CO2 from the volume of aggregate production to enhance the opportunities for sustainable economic development.Originality/valueThe study uniquely correlates the declining trend of the emission intensity of India's gross domestic product (GDP) and the inclining trend of the overall emissions due to ever-increasing gross output in the form of a comprehensive accounting relationship.