The grey water footprint intensity of the state economies: empirically testing the environmental kuznets curve hypothesis for the Indian industries
Student name: Ms Swati Agarwal
Guide: Prof Kanchan Chopra
Year of completion: 2012
Host Organisation: TERI University
Abstract: In the EKC literature, economists have traditionally focused on a few pollutants, and have
derived individual pollutant wise EKC relationship. But verifying the EKC for particular
pollutants might not be true reflection of economic activity and its polluting nature. In a view
to overcome the existing theoretical and empirical limitations of the EKC literature, the
present study attempts to investigate the EKC relationship between the Grey Water Footprint
Index as a measure of the Industrial water pollution and Gross State Domestic Product using
a panel regression analysis with the data set consisting of 12 states across 8 year time period
from 1998-2006. The study also attempts to evaluate the decomposed effects of industrial
response to their water pollution intensity in the course of their development by employing a
cross- sectionally pooled regression analysis for the Indian states pooled across the 6 most
polluting Industrial sectors as per CPCB: sugar, tanneries, oil refineries, fertilizers, distillery
and edible oil. Results indicate that the growth in the country is majorly fuelled by the
polluting industries while the growth benefits are not getting transitioned into the investments
in environment friendly measures. Also in the case for India the feedback effect of rising
pollution levels on the growth of the economy did not exist. Results designate an EKC type
pattern for India in the case of GWFI with the inflexion at Rs 14,000 GSDP/Capita level. The
voluntary willingness of the industries to reduce their footprint was missing while technology
and capital seemed to play a very significant role in the water pollution scenario. Another
significant result was obtained in the case of regulatory stringency for the polluting
industries which pointed a need towards targeted policies.
Key Words: Grey Water Footprint; Environmental Kuznets Curve; Industrial Efficiency;
Regulatory Stringency
