Impact of ISO 14000 on Energy Efficiency : An Analysis of Energy Intensity of Manufacturing Plants in India

The paper uses plant-level data for 2008-2015 to examine the impact of the adoption of ISO 14000 on the energy intensity of Indian manufacturing plants. The propensity score matching difference-in-difference (PSM-DID) estimator is used for assessing the effect. The results show that the adoption of ISO 14000 tends to reduce energy intensity in Indian manufacturing, especially among the low technology and medium to low technology industries which account for about five-sixths of the energy consumption in manufacturing. Such an effect of ISO 14000 on energy efficiency is found again when an analysis is undertaken for the industries covered under the Perform-Achieve-Trade (PAT) scheme of the Indian government, which is a market-based compliance mechanism aimed at improving the energy efficiency of highly energy-intensive industries. Thus, there is an indication from the empirical results that the adoption of ISO 14000 in Indian manufacturing results in significant environmental performance gains in terms of reduced energy use and hence lower carbon emissions