Investigating asymmetric impacts of total factor energy efficiency on carbon emissions in India

Abstract

Abstract As many complex energy relations are not linear and have diminishing returns, assuming a symmetric (linear) effect of energy efficiency (ENEF) on carbon emissions (CAE) has limited our understanding of the emission-ENEF nexus. This study, therefore, estimates total factor energy efficiency by employing a stochastic frontier approach and analyses the asymmetric (nonlinear) long and short-run effects of ENEF on CAE, using sample panels for India covering the period 2000 to 2014. The asymmetric impacts are examined by utilising a nonlinear panel autoregressive distributed lag modelling framework. The findings evidenced the existence of asymmetric short-run and long-run effects of ENEF on CAE for India. Based on the outcomes, numerous crucial implications are discussed with a particular reference to developing economies like India.