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Energy consumption, carbon emissions, and economic growth in India: Evidence from directed acyclic graphs

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  • Yang, Zihui
  • Zhao, Yongliang

Abstract

This study investigates the temporal linkages among economic growth, energy consumption, and carbon emissions for India during the period 1970–2008 using recently developed methods of out-of-sample Granger causality tests and directed acyclic graphs (DAG). Building on the data-driven DAG representation, we uncover the contemporaneous causal patterns between economic activities and environmental pollutants, which is first documented in the literature and could further improve the investigation of the dynamic linkage pattern. The results show that energy consumption uni-directionally Granger causes carbon emissions and economic growth, while there is a bidirectional causality between carbon emissions and economic growth. We also find that trade openness is one of the important determinants of energy consumption and carbon emissions. Some important policy implications are also discussed.

Suggested Citation

  • Yang, Zihui & Zhao, Yongliang, 2014. "Energy consumption, carbon emissions, and economic growth in India: Evidence from directed acyclic graphs," Economic Modelling, Elsevier, vol. 38(C), pages 533-540.
    • Handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:533-540
    DOI: 10.1016/j.econmod.2014.01.030
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    More about this item

    Keywords

    Energy consumption; Carbon emissions; Economic growth; India; Out-of-sample granger causality tests; Directed acyclic graphs;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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