Seminar-Industrial Agglomeration and CO2 Emissions in India’s Manufacturing Sector

Seminar on Industrial Agglomeration and CO2 Emissions in India’s Manufacturing Sector

To be delivered by Dr. K. Chandra Shekar and Mr. Mohammed Izudheen

Abstract: 

Industrial agglomeration has been associated with firm-level productivity gains, yet its implications for environmental degradation in India, particularly firm-level carbon emissions, are understudied. This paper attempts to estimate the impact of industrial agglomeration on firm-level carbon emissions using panel data from the Annual Survey of Industries for the period 2008-09 to 2022-23. The major findings of the study reveals that industrial agglomeration lowers CO₂ emissions in the overall sample and in the “red” (highly polluting) and low-technology category industries, while showing no significant effect in the orange, medium-technology and high-technology sub-samples although it is negatively associated. Total factor productivity is a consistent and significant driver of lower emissions, while output scale, export intensity and import intensity are consistently associated with higher emissions. The results indicate that the policy of industrial clustering can be used in conjunction with direct measures for productivity and technology upgrading in India’s climate policy.