Combining Indicators of Energy Consumption and CO2 Emissions: EKC in India

This study investigates the relationship between CO2 emissions and some of macroeconomic factors other including per capita GDP responsible for change in CO2 emissions for India. We consider factors such as price of fossil fuels in the form of Wholesale Price Index (WPI) for fuel and power, per capita energy consumption, energy reforms and per capita GDP for the present study. Besides understanding the contribution of these factors to CO2 emission levels, this paper also tries to find out whether there exists the famous inverted U shape relationship between per capita GDP and CO2 emissions as hypothesized by Environmental Kuznets Curve (EKC). For this purpose, panel data for aforesaid factors has been taken for the period 1981-2006 for India. The results of this study reveal that per capita energy consumption followed by WPI (fuel and power) are more significant factors than per capita GDP in explaining the variations in per capita CO2 emissions. Also that India has not yet reached to the turning point in EKC for CO2 emissions.