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Analysis of carbon productivity for firms in the manufacturing sector of India

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  • Bagchi, Prantik
  • Sahu, Santosh Kumar
  • Kumar, Ajay
  • Tan, Kim Hua

Abstract

Emission estimation and carbon productivity at the firm level for India's manufacturing sector are scanty. We fill this gap by estimating CO2 emissions at the firm level and further determining the optimal and the actual trade-offs between emissions and output at the firm level. We use data from the center for Monitoring Indian Economy (CMIE) Prowess IQ, and MoEF&CC, Government of India. Between 1998 and 2019, growth in CO2 emission and output is estimated to be 3 and 9%, respectively. This indicates a case of weak decoupling for the manufacturing sector where technology, export promotion strategies, environmental taxes, energy mix at the firm level, and cap-and-trade policy are the significant determinants of carbon productivity for the sample firms in India's manufacturing sector. We conclude that improving carbon productivity is necessary for better decoupling and R&D intensity to be complemented with R&D efficiency to gain carbon productivity for the manufacturing industry. These findings are crucial for better energy and climate policy for the Indian economy.

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  • Bagchi, Prantik & Sahu, Santosh Kumar & Kumar, Ajay & Tan, Kim Hua, 2022. "Analysis of carbon productivity for firms in the manufacturing sector of India," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:tefoso:v:178:y:2022:i:c:s004016252200138x
    DOI: 10.1016/j.techfore.2022.121606
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    2. Kuosmanen, Natalia & Maczulskij, Terhi, 2022. "The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing," ETLA Working Papers 99, The Research Institute of the Finnish Economy.
    3. Giri, Prashant & Sharma, Tarun, 2024. "Market instrument for the first fuel and its role in decarbonizing Indian industrial production," Energy Policy, Elsevier, vol. 190(C).
    4. Gulliver Lux & Emmanuelle Fromont & Thi Le Hoa Vo, 2023. "Green business: Growth or degrowth to meet IPCC targets? Discussion of an assessment tool: IPCC CAPRO change target," Post-Print hal-04188747, HAL.
    5. Yang, Yi & Qin, Huan, 2024. "The uncertainties of the carbon peak and the temporal and regional heterogeneity of its driving factors in China," Technological Forecasting and Social Change, Elsevier, vol. 198(C).

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    More about this item

    Keywords

    Carbon productivity; Energy efficiency; Decoupling growth; Threshold regression; Club convergence;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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