As one of the world’s fastest-growing economies, India’s energy demand is predominantly met by fossil fuels, which significantly contribute to greenhouse gas emissions. The purpose of this study is to investigate the asymmetric relationship between fossil fuel consumption (disaggregated into coal, oil and natural gas) and carbon emissions in India.
This study uses the nonlinear autoregressive distributed lag (NARDL) methodology, as proposed by Shin et al. (2014), to capture the asymmetric impacts of positive and negative shocks in fossil fuel consumption on carbon emissions. This advanced econometric approach allows for the exploration of non-linearities in the energy-emissions nexus.
The results reveal a significant asymmetric impact of fossil fuel consumption on carbon emissions. Negative shocks (reductions in fossil fuel use) have a more pronounced effect on emissions mitigation than positive shocks (increases in usage). Among the energy sources, oil consumption exhibits the highest emission intensity during negative shocks, underscoring its critical role in emissions dynamics.
The findings suggest the urgent need for policymakers and industry leaders to prioritise reductions in fossil fuel consumption, particularly oil, to achieve meaningful emissions mitigation. Investments in cleaner energy alternatives and the adoption of mitigation-oriented energy portfolios are essential to align with India’s net-zero emissions goal by 2070.
This study contributes to the existing literature by examining the non-linear and asymmetric relationship between fossil fuel consumption and carbon emissions in India, a perspective that has been largely overlooked in prior studies. The results provide actionable insights for policymakers to design effective strategies for sustainable energy transitions.
