Analysis of carbon productivity for firms in the manufacturing sector of India

Bagchi, Prantik; Kumar Sahu, Santosh; Kumar, Ajay; Tan, Kim Hua

Abstract

Emission estimation and carbon productivity at the firm level for India's manufacturing sector are scanty. We fill this gap by estimating CO2 emissions at the firm level and further determining the optimal and the actual trade-offs between emissions and output at the firm level. We use data from the Center for Monitoring Indian Economy (CMIE) Prowess IQ, and MoEF&CC, Government of India. Between 1998 to 2019, growth in CO2 emission and output is estimated to be 3 and 9 per cent, respectively. This indicates a case of weak decoupling for the manufacturing sector where technology, export promotion strategies, environmental taxes, energy mix at the firm level, and cap-and-trade policy are the significant determinants of carbon productivity for the sample firms in India's manufacturing sector. We conclude that improving carbon productivity is necessary for better decoupling and R&D intensity to be complemented with R&D efficiency to gain carbon productivity for the manufacturing industry. These findings are crucial for better energy and climate policy for the Indian economy.

• Journal Article Type: Article
• Acceptance Date: Mar 3, 2022
• Online Publication Date: Mar 10, 2022
• Publication Date: 2022-05
• Deposit Date: Mar 22, 2022
• Publicly Available Date: Sep 11, 2023
• Journal: Technological Forecasting and Social Change
• Print ISSN: 0040-1625
• Peer Reviewed: Peer Reviewed
• Volume: 178
• Article Number: 121606
• DOI: https://doi.org/10.1016/j.techfore.2022.121606
• Keywords: Carbon productivity; energy efficiency; decoupling growth; threshold regression; club convergence JEL Classification: Q53 Q54 Q55 Q57
• Public URL: https://nottingham-repository.worktribe.com/output/7644747
• Publisher URL: https://www.sciencedirect.com/science/article/abs/pii/S004016252200138X?via%3Dihub