Forecasting fossil CO2 emissions in China and India: an analysis with various predictors

Details

Supervisors

Iania, Leonardo

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

In this paper, the fossil emissions of China and India are forecasted in the medium term (2025) using ARIMA model and long-term (2030) using VECM model. It is shown that the fossil emissions of both countries are expected to increase by a factor of 1,21 for China and 1,80 for India between 2022 and 2030. This research also studies the causal relationship between 33 macroeconomic indicators and China’s fossil CO2 emissions between 1961 and 2022, and between 35 macroeconomic indicators and India’s fossil CO2 emissions between 1961 and 2022. Consistency is shown with the analyses of Bennedsen et al. (2021), where predictors related to economic activity and production have, on average, the highest R-squared values among all predictors. Finally, using CO2 VECM forecasts and S&P GDP forecasts, it is shown that both China and India are not expected to meet their carbon intensity targets for 2030 if they do not change their methods of energy and goods production.