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Energy-GDP decoupling in a second best world—a case study on India

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  • Céline Guivarch
  • Sandrine Mathy

Abstract

Reference emission scenarios in the literature have been the target of criticisms that suggest they convey too optimistic views on spontaneous energy-GDP decoupling of emerging countries economies. This article focuses on the case of India. It explores the role of current suboptimalities of the Indian power sector (structural under-investment in the sector leading to capacity shortage, power cuts and low efficiency) on future energy-GDP decoupling. To do so, it uses a hybrid general equilibrium framework, in which these suboptimalities are explicitly introduced. The results highlight that whether the constraints on investments in the power sector persist or not leads to contrasted trends in energy-GDP decoupling and GHG emissions. Over the short-term, capital scarcity in the power sector constrains the development of energy-intensive activities and therefore leads to higher energy-GDP decoupling. But on the longer-term, constrains on the power sector capacity limits substitution from fossil fuels to electricity, which entails both a low energy-GDP decoupling and a constraint on GDP growth when oil prices are high. The alleviation of suboptimalities appears thus as an insurance policy towards future oil price increase.
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  • Céline Guivarch & Sandrine Mathy, 2012. "Energy-GDP decoupling in a second best world—a case study on India," Climatic Change, Springer, vol. 113(2), pages 339-356, July.
    • Handle: RePEc:spr:climat:v:113:y:2012:i:2:p:339-356
    DOI: 10.1007/s10584-011-0354-8
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    Cited by:

    1. Ruben Bibas & C. Cassen & Renaud Crassous & Céline Guivarch & Meriem Hamdi-Cherif & Jean Charles Hourcade & Florian Leblanc & Aurélie Méjean & Eoin Ó Broin & Julie Rozenberg & Olivier Sassi & Adrien V, 2022. "IMpact Assessment of CLIMate policies with IMACLIM-R 1.1. Model documentation version 1.1," Working Papers hal-03702627, HAL.
    2. Guivarch, Céline & Monjon, Stéphanie, 2017. "Identifying the main uncertainty drivers of energy security in a low-carbon world: The case of Europe," Energy Economics, Elsevier, vol. 64(C), pages 530-541.
    3. Mathy, Sandrine & Menanteau, Philippe & Criqui, Patrick, 2018. "After the Paris Agreement: Measuring the Global Decarbonization Wedges From National Energy Scenarios," Ecological Economics, Elsevier, vol. 150(C), pages 273-289.
    4. Sandrine Mathy & Odile Blanchard, 2016. "Proposal for a poverty-adaptation-mitigation window within the Green Climate Fund," Climate Policy, Taylor & Francis Journals, vol. 16(6), pages 752-767, August.
    5. Sandrine Mathy, 2013. "Le positionnement de l'Inde sur le changement climatique," Working Papers halshs-00995050, HAL.
    6. Huber, Matthias & Roger, Albert & Hamacher, Thomas, 2015. "Optimizing long-term investments for a sustainable development of the ASEAN power system," Energy, Elsevier, vol. 88(C), pages 180-193.
    7. Jia, Hongxiang & Li, Tianjiao & Wang, Anjian & Liu, Guwang & Guo, Xiaoqian, 2021. "Decoupling analysis of economic growth and mineral resources consumption in China from 1992 to 2017: A comparison between tonnage and exergy perspective," Resources Policy, Elsevier, vol. 74(C).
    8. Guivarch, Celine & Monjon, Stéphanie, 2016. "Energy security in a low-carbon world: Identifying the main uncertain drivers of energy security in Europe," Conference papers 332807, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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