Determinants of Emission and Energy Intensities in Indian Organized Manufacturing Sector

Abstract

The emission and energy consumption in absolute form is not considered as a better measurement of emission intensity and energy intensity respectively. This paper estimates the factors which influence emission and energy intensity in the Indian manufacturing sector. For estimating these variables, the panel data analysis has been deployed across three manufacturing industry groups, viz., overall manufacturing sector, high emission-intensive industries and low emission-intensive industries. The random effect model highlights that an increase in energy intensity and material intensity leads to higher emission intensity. The study also reveals that the manufacturing sector does not support the Environmental Kuznets Curve hypothesis. Further, high emission-intensive industries are capital-intensive industries while less emission-intensive industries are labour-intensive industries. This raises the question about the technology used by the manufacturing sector, especially high emission-intensive industries.