International Journal of Financial Management and Economics
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E-ISSN: 2617-9229|P-ISSN: 2617-9210
International Journal of Financial Management and Economics
Printed Journal   |   Refereed Journal   |   Peer Reviewed Journal
Vol. 7, Issue 1 (2024)

Revisiting the Environmental Kuznets Curve (EKC) Hypothesis in India: The Role of Crude Oil Consumption


Shalini Jaiswal, Nagendra Kumar Maurya and Shivam Agarwal

The study investigates the dynamic relationship between crude oil consumption, economic growth, and carbon emissions. The study revisits the position of the environmental Kuznets curve (EKC) hypothesis in India by integrating the function of environmental deterioration with role of crude oil consumption. Energy consumption has increased significantly since 2000, with coal, oil, and solid biomass still meeting 80% of the demand. Crude oil constitutes 80 to 87 percent of carbon, and India is the third largest crude oil consumer globally. As per the Indian Energy Outlook Report 2021, India experiences the most remarkable rise in energy demand of any nation in all our scenarios to 2040 due to its growing economy, population, urbanization, and industrialization. Crude oil consumption and imports proliferate due to rising vehicle ownership and road transport use. Oil demand has more than doubled since 2000 due to growing vehicle ownership and road transport use. India is the third‐largest global emitter of CO2, despite low per capita CO2 emissions, as per IEA, 2021. As crude oil is demanded by every sector, such as industry, transport, buildings and agriculture, greater demand comes from the transport sector. Freight transport contributes to nearly half of the CO2 emissions from road transport, i.e., more than 45 percent. India, the fastest-growing economy, and the third-largest energy-consuming country have been investing significantly in renewable energy to make clean energy. The study aims to analyse the relationship between economic growth and emission from crude oil consumption as per capita in India. Although carbon emissions from energy consumption and economic growth nexus are studied in the literature, this is the first study to examine the effect of economic growth on emissions from crude oil consumption in India. This study is critical as India has a significant role in the world in both economic and environmental terms. The study estimates the Environmental Kuznets Curve (EKC) for India by employing time series data from the period of 1990-2020. The study tests the Environmental Kuznets Curve hypothesis based on secondary data with reference to India; an empirical model is tested to analyse the relationship between CO2 emissions (in per capita metric tonnes) from oil consumption and real GDP (per capita). The empirical findings of the study support the existence of the EKC hypothesis. The study reveals that per capita growth tends to improve environmental quality. The study suggests that at a broad level of development, per capita emissions of CO2 emission begin to decline. The acceptance of EKC suggests that economic development at early stages may lead to environmental damage, but significant improvement is possible at later stages. Evidence suggests that while early economic development may contribute to environmental harm, later stages of development offer the potential for significant progress and improvement. The acceptance of EKC underscores this dynamic relationship between economic growth and environmental sustainability.
Pages : 261-267 | 141 Views | 51 Downloads


International Journal of Financial Management and Economics
How to cite this article:
Shalini Jaiswal, Nagendra Kumar Maurya, Shivam Agarwal. Revisiting the Environmental Kuznets Curve (EKC) Hypothesis in India: The Role of Crude Oil Consumption. Int J Finance Manage Econ 2024;7(1):261-267. DOI: 10.33545/26179210.2024.v7.i1.300
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