Does electricity consumption impact biocapacity deficit? Evidence from domestic and commercial electricity consumption in India

Abstract

The increasing population across the world poses challenges for the fulfilment of electricity demand across various sectors, and subsequently impacts biocapacity. As India is the second-most populous country and the third largest electricity consumer globally, such challenges need to be addressed. While it is true that, in the context of electricity, pollution stems from the producer’s side, that from the consumer’s side is largely ignored. Using the Vector Error Correction model, this study investigates whether electricity consumption from the domestic and commercial sectors has an impact on biocapacity deficit. The result shows that, in the long run, domestic electricity consumption is not significant in causing biocapacity deficit, whereas commercial electricity consumption has an increasing effect on the latter, making it unsustainable. Further, lower levels of income and natural resource rents are also observed to lead to biocapacity deficit. In the short run, however, neither domestic nor commercial consumption has any significant impact on biocapacity deficit. The findings call for an extended focus on the sustainable management of electricity consumption across sectors so that their adverse impact on biocapacity can be minimised.