Sectoral carbon linkages of Indian economy based on hypothetical extraction model

Abstract

Purpose: Presentation of the different industrial carbon linkages of India. The purpose of this paper is to understand the direct and indirect impact of these industrial linkages. Design/methodology/approach: This study uses a hypothetical extraction method with its various extensions. Under this method, different carbon linkages of a block are removed from the economy, and the effects of carbon linkages are determined by the difference between the original and the post-removal values. Energy and non-energy carbon linkages are also estimated. Findings: “Electricity, gas and water supply (EGW)” at 655.61 Mt and 648.74 Mt had the highest total and forward linkages. “manufacturing and recycling” at 231.48 Mt had the highest backward linkage. High carbon-intensive blocks of “EGW” plus “mining and quarrying” were net emitters, while others were net absorbers. “Fuel and chemicals” at 0.08 Mt had almost neutral status. Hard coal was the main source of direct and indirect emissions. Practical implications: Net emitting and key net forward blocks should reduce direct emission intensities. India should use its huge geographical potential for industrial accessibility to cheaper alternative energy. This alongside with technology/process improvements catalyzed by policy tools can help in mitigation efforts. Next, key net-backward blocks such as construction through intermediate purchases significantly stimulate emissions from other blocks. Tailored mitigation policies are needed in this regard. Originality/value: By developing an understanding of India’s industrial carbon links, this study can guide policymakers. In addition, the paper lays out the framework for estimating energy and non-energy-based industrial carbon links.