The conflict between economy and environment—an environmentally extended social accounting matrix for India

Abstract

This paper is an extension of existing ESAM for India for the year 2006– 07 by incorporation of local air pollutants. The ESAM multiplier model described here analysed the conflict between economic growth and environmental emissions. The available emission data in India shows only the direct contribution of any activity on total emission inventory of India, whereas this multiplier model enables us to understand the direct- and indirect-induced effects of economic growth on GHG emission. This is true from the fact that the thermal electricity, cement, and iron and steel sectors are highly energy intensive, and hence their impact on emission is very high as compared to other sectors of the Indian economy. But it is also interesting to observe that the sectors which are low energy intensive have significant impact on overall emission inventory through the indirect-induced impact. On the other hand, the income-pollution multiplier presented in this study brings forth the issue that rural poverty alleviation will not impact much to the environment unless it is happening through rural to urban migration. Finally, these linkages would help policy makers to understand sector-specific policy requirement for environmental emission control.