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CO 2 emission and firm heterogeneity: a study of metals and metal-based industries in India

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Industrial energy efficiency has emerged as one of the key issues in India. The increasing demand for energy that leads to growing challenge of climate change has resulted major issues. It is obvious that high-energy intensity leads to high carbon intensity of the economy. This paper is an attempt to estimate the firm level CO
2
emissions for the metals and metal-based industries in Indian manufacturing. Calculation of firm level emissions is carried out following IPCC reference approach methodology of carbon dioxide emission from fuel combustion. We tried to find out the inter-firm differences of CO
2
emission in the metals and metal-based industries. Data for this study is collated from the CMIE PROWESS online database from 2000–2008, IEA energy statistics and IPCC conversion factors for each of the fuel types. This study found size, age, energy intensity and technology import intensity as the major determinants of CO
2
emission intensity of Indian metal and metal-based firms. In addition capital and labour intensity of the firms are also related to the firms’ emission intensity.

Keywords: CO 2 emission, firm heterogeneity, panel data econometrics, metals and metal-based industries, India

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