Club convergence in per capita carbon dioxide emissions across Indian states

Although several studies examine the convergence of per capita carbon dioxide (CO2) at the country level, research at the regional level is scarce except in countries like China and the USA. This study bridges this research gap by considering India's regional-level CO2 emissions convergence. In particular, this study proposes to undercover the convergence patterns of carbon emissions towards designing effective carbon reduction policies in the future at the regional level in India. Addressing this research is vital since this question is closely allied with fairness in the distribution of per capita emissions. In order to achieve the stated objective, this study first computes per capita CO2 emissions. Then, it uses the convergence notion to analyse the CO2 emissions in the case of 16 Indian states from 2003–04 to 2018–19. By employing Phillips and Sul's clustering procedure, this study supports the presence of overall divergence when all 16 Indian states are considered as a group. This suggests that all states together are not forming a single steady state rather, they are forming multiple steady (or club convergence) due to heterogeneity in per capita CO2 emissions. Moreover, 16 states cluster into three clubs which have distinct transition paths. From the policy perspective, it is important for the government of India to target reducing per capita CO2 emissions by focusing on clusters of states in a phase-wise manner.