The one Lakh car, economic growth and CO2 emissions in India
(English)Manuscript (Other academic)
The expansion of the transport sector is an essential part of the economic and social development of a nation. But in many cases transportation also has adverse environmental implications. Today these effects in India are relatively mild mainly due to the low number of cars in the country. At the same time the economic growth of India is creating new consumer segments. These segments, even though poor by western standards will by their sheer size create a large demand for cheap transportation. The expectation of this demand has incited automobile manufacturers to develop and launch new product lines of extremely cheap cars. Using household and manufacturer data this paper estimates a structural model of household demand for automobiles in India. Exploiting the model to simulate future demand the predictions are that during the next 20 years the number of cars in India will increase by 30 million due to economic growth and up to 8 million more due to the introduction of low-budget cars. As a consequence the CO2 emissions from private cars will increase by 634% where more than one sixth of the increase is due to the introduction of low-cost cars. The increase due to the development of low-cost cars is of the same magnitude as the decrease commonly attributed to technological advancements in energy efficiency in estimation models.
Transport, Climate Change
Research subject Economics
IdentifiersURN: urn:nbn:se:su:diva-26960OAI: oai:DiVA.org:su-26960DiVA: diva2:212120