Exploring the effects of economic growth, population density and international trade on energy consumption and environmental quality in India

Abstract

Purpose

This paper aims to investigate the effects of economic growth, population density and international trade on energy consumption and environmental quality in India.

Design/methodology/approach

Taking annual data of 1971-2011, autoregressive distributed lag bounds testing technique is applied to explore the long run link between the series. The Granger causality test is used to determine the direction of causality between the variables.

Findings

The obtained results confirm the cointegration of variables, and economic growth and population density are found to have significant positive effects on energy consumption in both the short and long runs. CO₂ emissions are also positively and significantly affected by population density and energy consumption, and negatively affected by economic growth.

Originality/value

The paper is original and valuable in the sense that it has considered two relevant additional explanatory variables, namely, population density and trade openness, which got little attention in the past. This research is an improvement over the previous studies because it has looked at the separate effects of explanatory variables on energy consumption, in addition to the effects on carbon emissions. Therefore, the findings of this research are more reliable because this adopted methodology is better and extensive, and the authors have properly addressed the issue of omitted variable bias.

Citation

Rahman, M.M. (2020), "Exploring the effects of economic growth, population density and international trade on energy consumption and environmental quality in India", International Journal of Energy Sector Management, Vol. 14 No. 6, pp. 1177-1203. https://doi.org/10.1108/IJESM-11-2019-0014