A Disaggregated analysis of the impact of fossil fuel consumption on carbon dioxide emissions in India: evidence from the TVP-VAR model

Abstract This paper investigates the presence of time-varying effects of fossil fuel consumption on CO2 emissions in India. To accomplish this, the time-varying cointegration test developed by Bierens and Martins (2010) is employed to analyze the long-run relationship between the variables. According to the long-run time-varying coefficients, GDP has a positive and significant impact on emissions. This effect is increasing over time. The parameter estimates reveal the polluting effects of all fossil fuels. However, the positive effect of natural gas is found to be lower and less significant. Along with the cointegration analysis, the TVP-VAR model is used to investigate the short-run time-varying effects of fossil fuel use on CO2 emissions. The TVP-VAR findings also demonstrate that changes in income and fossil fuel consumption have a positive and significant impact on environmental degradation. Coal is found to be the most polluting fuel, followed by oil consumption. According to time-varying responses, increased natural gas consumption has a positive effect on emissions, but with the least influence when compared to other fossil fuels.