The dynamic relationships among CO2 emissions, renewable and non-renewable energy sources, and economic growth in India: Evidence from time-varying Bayesian VAR model

By Sang Hoon Kang, Faridul Islam, Aviral Kumar Tiwari. Structural Change and Economic Dynamics, 2019

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Abstract We apply a three-variable VAR model with probabilistic variability using a time-varying parametric approach to determine the dynamic interactions among GDP growth, energy use by renewable energy sources (RES, wind, solar, or hydro) and non-renewable energy sources (NRES, hydroelectric or coal) and CO2 emission. Further, we characterize and quantify the impact of the nexus on the CO2 emissions, energy sources (RES and NRES) vis-a-vis India's economic growth and fluctuations during 1965Q1-2015Q4. We contribute to the literature by finding that stochastic volatility for RES and NRES appear to be U-shaped besides using TVP-VAR model to the Indian context. This U-shaped pattern seems to be related to economic growth. We also observe the time-varying patterns of the impact transmission mechanisms among energy sources, CO2 emissions, and GDP. In addition, the impulse response of GDP from a positive shock to CO2 varies with the type of energy use in different time horizons.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/fbb849cff4322a5054a2f5c3fa4c18a73d228e46