The regulated coal sector and CO 2 emissions in Indian growth process: Empirical evidence over half a century and policy suggestions Mita Bhattacharya a,⇑ , Shuddhasattwa Raﬁq b , Hooi Hooi Lean c , Sankar Bhattacharya d a Department of Economics, Monash University, Caulﬁeld, Victoria 3145, Australia b Economics, Deakin Graduate School of Business, Faculty of Business & Law, Victoria 3220, Australia c Economics Program, School of Social Sciences, University Sains Malaysia, Malaysia d Department of Chemical Engineering, Monash University, Clayton, Victoria 3800, Australia highlights  Indian growth process remains coal dependent.  Regulation structure in the coal sector will inﬂuence carbon abatement policies.  Both demand management and supply side policies are signiﬁcant for energy security.  Investment in cleaner coal technologies would help future sustainable growth. article info Article history: Received 3 March 2017 Received in revised form 3 July 2017 Accepted 15 July 2017 Keywords: Regulation Energy Coal India Coal rent abstract Despite the recent changing trend in the energy-mix, coal remains the primary source of energy in India. The coal sector in India is one of the most regulated sectors in the world. Considering both sides of the market, we establish the presence of long-run dynamics among economic growth and carbon-dioxide (CO 2 ) emissions over half a century. Our innovation in this study is to introduce coal rent, a proxy for regulated coal sector in India in explaining CO 2 emissions and the growth process. We ﬁnd coal rent inﬂuences CO 2 emissions with a feedback effect. Both trade openness and ﬁnancial development are established to be signiﬁcant in inﬂuencing growth process with a feedback effect. Using the longest available time series data, the study ﬁlls the major gap in the literature by incorporating the competitive process of this sector in the demand-supply framework and establish the need for investment in advanced coal technologies and alternative energy sources in breaking regulatory barriers. In this respect, we establish a signiﬁcant role of trade openness and ﬁnancial development in maintaining economic growth and implementing carbon abatement policies in future. Ó 2017 Elsevier Ltd. All rights reserved. 1. Introduction Since independence in 1947, the economic growth rate in India was only around three percent for almost three decades. This growth rate increased to 7.5% in 2014. 1 Coal, as the primary source of energy, has a signiﬁcant inﬂuence on economic growth in improv- ing social infrastructure and industrialization in the economy. Nationwide economic reforms since the 1990s have brought about considerable changes in the Indian economy. However, the rate of change has been slow in the coal sector and the sector remains highly regulated [2]. The World Energy Outlook [3] published by the International Energy Agency (IEA) has ranked India third in the world, both in production and consumption of coal, while the country has the fourth largest coal reserves after the United States, Russia and China. By 2035, growth in coal consumption will increase by 360 Mtoe, India will be the second largest growth market for coal with 70% demand is from the power station. 2 Coal supplies two- thirds of total electricity production and over one-half of the total energy consumption in this country. Due to the supply constraint in a monopoly market environment, coal imports have increased in the recent years. http://dx.doi.org/10.1016/j.apenergy.2017.07.061 0306-2619/Ó 2017 Elsevier Ltd. All rights reserved. ⇑ Corresponding author. E-mail addresses: Mita.Bhattacharya@monash.edu (M. Bhattacharya), shuddhasattwa.raﬁq@deakin.edu.au (S. Raﬁq), Sankar.Bhattacharya@monash.edu (S. Bhattacharya). 1 See Ref. [1]. 2 BP Energy Outlook [4]. Applied Energy 204 (2017) 667–678 Contents lists available at ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy