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Carbon pricing and decoupling between greenhouse gas emissions and economic growth: A panel study of 29 European countries, 1996–2014

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  • Inhwan Ko
  • Taedong Lee

Abstract

This study explores why the levels of decoupling between greenhouse gas (GHG) emissions and economic growth vary across time and countries by examining to which extent carbon pricing instruments are driving this decoupling. We expect that the implementation of carbon pricing instruments facilitates decoupling, as they are designed to achieve cost‐efficient GHG reduction. We analyze a panel data of 29 European countries between 1996 and 2014 to examine the relationships between two carbon pricing instruments (emission trading (ETS) and carbon tax) and emission intensity (GHG emissions per unit of GDP) which we use to measure decoupling trends. Results from two‐way fixed effects models show that emission trading contributes to decoupling, whereas our evidence does not support the role of carbon tax. Furthermore, emission trading is negatively associated with both emission intensity and GHG emissions, implying that it contributes to strong decoupling. Using coarsened exact matching (CEM), our results suggest that even a single emission trading policy (e.g., EU‐ETS) across different jurisdictions may render a heterogeneous effect on decoupling depending on their socioeconomic conditions. 本研究通过分析碳定价工具在多大程度上驱动脱钩，探究了温室气体（GHG）排放和经济增长的脱钩程度为何在不同时间和国家中出现差异。我们期望碳定价工具的执行会促进脱钩，因为它们被设计用于实现成本有效的GHG减排。我们分析了一项关于1996‐2014年间29个欧洲国家的面板数据，分析两种碳定价工具（排放交易（ETS）和碳税）和排放强度（每个GDP单位的GHG排放）之间的关系，并通过这种关系来衡量脱钩趋势。双向固定效应模型得出的结果表明，排放交易促进了脱钩，不过，我们的证据并不支持碳税的作用。此外，排放交易与排放强度及GHG排放均呈负相关，这暗示其对强有力的脱钩作贡献。通过使用广义精确匹配（CEM）数据，我们的研究结果暗示，即使是跨越不同管辖范围的单一排放交易政策（例如EU‐ETS），也能对脱钩产生异质性效果，这取决于其社会经济条件。 Este estudio explora por qué los niveles de disociación entre las emisiones de gases de efecto invernadero (GEI) y el crecimiento económico varían a lo largo del tiempo y los países al examinar hasta qué punto los instrumentos de fijación de precios del carbono están impulsando esta disociación. Esperamos que la implementación de los instrumentos de fijación de precios del carbono facilite la disociación, ya que están diseñados para lograr una reducción de GEI rentable. Analizamos un panel de datos de 29 países europeos entre 1996 y 2014 para examinar las relaciones entre dos instrumentos de fijación de precios del carbono (comercio de emisiones (ETS) e impuesto al carbono) y la intensidad de las emisiones (emisiones de GEI por unidad de PIB) que utilizamos para medir las tendencias de disociación. Los resultados de los modelos de efectos fijos bidireccionales muestran que el comercio de emisiones contribuye a la disociación, mientras que nuestra evidencia no respalda el papel del impuesto al carbono. Además, el comercio de emisiones está asociado negativamente tanto con la intensidad de las emisiones como con las emisiones de GEI, lo que implica que contribuye a una fuerte disociación. Utilizando datos aproximados de emparejamiento exacto (CEM), nuestros resultados sugieren que incluso una sola política de comercio de emisiones (por ejemplo, EU‐ETS) en diferentes jurisdicciones puede tener un efecto heterogéneo en el desacoplamiento dependiendo de sus condiciones socioeconómicas.

Suggested Citation

  • Inhwan Ko & Taedong Lee, 2022. "Carbon pricing and decoupling between greenhouse gas emissions and economic growth: A panel study of 29 European countries, 1996–2014," Review of Policy Research, Policy Studies Organization, vol. 39(5), pages 654-673, September.
    • Handle: RePEc:bla:revpol:v:39:y:2022:i:5:p:654-673
    DOI: 10.1111/ropr.12458
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