The role of liquefied petroleum gas in decarbonizing India: fresh evidence from wavelet-partial wavelet coherence approach.

Abstract

India is predominantly a fossil fuel-intensive South Asian country that has traditionally settled for higher economic gains at the expense of lower environmental quality. However, in the contemporary era, it has become essential for India to come up with viablesolutions that can enable the nation to transform its economy into a low-carbon one. Although replacing fossil fuel use with renewable energy sources is assumed to bethe ideal pathway to decarbonizing the Indian economy, achieving this cleanenergy transition involves a long-term process. Thus, the Indiangovernment should rather consider adoption of interim solutions to the environmental pollution problems faced by the nation. Against this backdrop, this study looks at whether enhancing the consumption levelof liquefied petroleum gas, a relatively cleaner fossil fuel, can help India reduce its carbon dioxide emissions figures andattain environmentally sustainable economic growth. The econometric analysis is designed as per the theoretical framework of the environmental Kuznets curve hypothesis whereby the effects of economic growth on carbon dioxide emissions are examined controlling for liquefied petroleum gas consumption in the context of India between 1990 and 2018. Based on the findings from the autoregressive distributed lag model bounds testanalysis, it is witnessed that there are long-run cointegrating relationships among per capita levels of carbon dioxide emissions, real gross domestic product, and liquefied petroleum gas consumption of India. Besides, the environmental Kuznets curve hypothesis is found to be valid only in the short run; however, it does not sustain in the long run since the economic growth-carbon dioxide emissions nexus is observed to follow a U-shaped relationship in the long run. Moreover, higher liquefied petroleum gas consumption is found to boost carbon dioxide emissions in the short run while reducing it in the long run. Furthermore, the findings from the wavelet and partial wavelet coherence and causality analyses also advocate in favor of promoting the use of liquefied petroleum gas in India in orderto significantlycurb theenergy use-relatedcarbon dioxide emission figures of the nation. Hence, considering these importantfindings,this study recommends that the Indian government should design policies for augmenting liquefied petroleum gas into the national energy mix and also adopt relevant green economic growth strategies in order to facilitate environmentally-sustainablegrowthof its economy.