The impact of population density, energy consumption, economic growth and trade openness on CO2 emissions in India

As the world's third largest carbon dioxide (CO2) emitter, India has long been believed to mostly compromise with international environmental obligation. Using annual data for the period 1970-2013, the study investigates the impact of population density, energy consumption, economic growth and trade openness on CO2 emissions in India. It applies the autoregressive distributed lag bounds testing approach to cointegration for establishing the existence of a long-run relationship and uses vector error correction model to determine the direction of causality between the variables. The results indicate that there is a meaningful long-run relationship between CO2 emissions and socioeconomic factors. We find that population density, energy consumption and economic growth have statistically significant positive effect on CO2 emissions both in the short-run and long-run. Among these three drivers, population density proves the main influencing factor of CO2 emissions changes. Therefore, a cautious population stabilization policy in the country would assist in reducing CO2 emissions and sustaining long-run economic growth. The findings further support the continued policy actions to develop the alternative energy sources such as renewable, and to use green and clean technologies to curb CO2 emissions without reducing energy consumption.