The Influence of Hydropower and Coal Consumption on Greenhouse Gas Emissions: A Comparison between China and India

Uğur Korkut Pata · Amit Kumar

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Energy, Environment, Economic Growth Climate Change Policy and Economics Environmental Impact and Sustainability

Abstract

This study mainly aims to investigate carbon status according to the Pollution Haven Hypothesis (PHH) in developing countries such as India and China based on annual time series data from 1980 to 2016. The recently developed bootstrap autoregressive distributed lag procedure is applied to observe the long-run effect of FDI, hydropower, and coal-based fossil fuel consumption on three repressive measures of carbon emissions. The empirical results of the analysis show that hydropower and coal consumption lead to an upsurge in carbon emissions and the size of the carbon footprint in China. Similarly, Chinese FDI increases the carbon footprint. Moreover, Indian FDI and coal consumption accelerate carbon emissions while hydropower has no impact on environmental degradation. These results suggest that the PHH exists in China and India and that the validity of the PHH varies according to differing carbon indicators. Based on the empirical results, effective policy practices can be implemented by replacing coal and hydropower with more effective renewable energy sources and allowing foreign investors to pursue environmental concerns in the fight against environmental degradation.

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