Energy efficiency in the Indian transportation sector: effect on carbon emissions

Energy efficiency gains are advocated to be a plausible strategy to mitigate rising carbon emissions in the Indian transportation sector. This study, thus, estimates the energy efficiency across transportation modes in India for 2000–2014, employing the panel stochastic frontier approach. Further, the long-run effect of energy efficiency gains on carbon emissions is also examined by employing the panel fully modified least square (FMOLS) and panel dynamic ordinary least square (DOLS) estimators. The empirical findings indicate an inverted U-shaped trend in energy efficiency for land transportation and a substantial rise for air transportation with higher volatility. However, the trend in energy efficiency for water transportation only shows a minor uptick with nearly stable movement. The long-run effect reveals that a 1% increase in energy efficiency will reduce carbon emissions in the transportation sector by more than 1%, between 1.343 (FMOLS) and 1.665% (DOLS). Based on such findings, a few implications are discussed to achieve a low-carbon energy system.