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Carbon Emissions and Economic Growth: Production-based versus Consumption-based Evidence on Decoupling

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  • Goher-Ur-Rehman Mir

    (Ecofys Consulting, Kanaalweg 15G, 3526 KL Utrecht, The Netherlands)

  • Servaas Storm

    (Delft University of Technology, The Netherlands)

Abstract

We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries (and 35 industries) during 1995-2007 from the World Input Output Database (WIOD). The estimates for per capita CO2 emissions are truly comprehensive as these include all carbon emissions embodied in international trade and global commodity chains. Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption based CO2 emissions are monotonically increasing with per capita GDP. We draw out the implications of these findings for climate policy and binding emission reduction obligations.

Suggested Citation

  • Goher-Ur-Rehman Mir & Servaas Storm, 2016. "Carbon Emissions and Economic Growth: Production-based versus Consumption-based Evidence on Decoupling," Working Papers Series 41, Institute for New Economic Thinking.
  • Handle: RePEc:thk:wpaper:41
    DOI: 10.2139/ssrn.2772131
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    More about this item

    Keywords

    Carbon Kuznets Curve; Climate change; Economic growth; Production-based CO2 emissions; Consumption-based CO2 emissions; Decoupling.;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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