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Carbon Dioxide Emissions and Economic Growth: An Assessment Based on Production and Consumption Emission Inventories

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  • Fernández-Amador, Octavio
  • Francois, Joseph F.
  • Oberdabernig, Doris A.
  • Tomberger, Patrick

Abstract

Working with a new dataset on comparable global CO2 production and consumption inventories spanning the 1997–2011 period, we investigate the relationship between real gross domestic product (GDP) per capita and CO2 emissions per capita associated with both production and consumption activities. By including linkages between production-based emissions in one country and final consumption in another (via cross-border value chains), we focus on the entire carbon chain. We estimate polynomial and threshold models, accounting for reverse causality and identification problems. We find that the income-elasticity for both inventories is regime-dependent and reflects small carbon efficiency gains from economic development. Carbon footprints show larger income-elasticities, while national policy instruments targeting production can clearly be circumvented by carbon embodied in intermediate trade. This implies problems of environmental sustainability that may require consumption-based policy instruments.

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  • Fernández-Amador, Octavio & Francois, Joseph F. & Oberdabernig, Doris A. & Tomberger, Patrick, 2017. "Carbon Dioxide Emissions and Economic Growth: An Assessment Based on Production and Consumption Emission Inventories," Ecological Economics, Elsevier, vol. 135(C), pages 269-279.
  • Handle: RePEc:eee:ecolec:v:135:y:2017:i:c:p:269-279
    DOI: 10.1016/j.ecolecon.2017.01.004
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    1. Fernández-Amador, Octavio & Francois, Joseph & Oberdabernig, Doris & Tomberger, Patrick, 2018. "The methane footprint of nations: Evidence from global panel data," Papers 1102, World Trade Institute.
    2. Karakaya, Etem & Yılmaz, Burcu & Alataş, Sedat, 2018. "How Production Based and Consumption Based Emissions Accounting Systems Change Climate Policy Analysis: The Case of CO2 Convergence," MPRA Paper 88781, University Library of Munich, Germany.
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    4. Nabernegg, Stefan & Bednar-Friedl, Birgit & Muñoz, Pablo & Titz, Michaela & Vogel, Johanna, 2019. "National Policies for Global Emission Reductions: Effectiveness of Carbon Emission Reductions in International Supply Chains," Ecological Economics, Elsevier, vol. 158(C), pages 146-157.
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    10. Octavio Fernandez-Amador & Joseph F. Francois & Patrick Tomberger, 2016. "MRIO linkages and Switzerland's CO2 profile:," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 67(03), pages 47-63, December.
    11. Fernández-Amador, Octavio & Francois, Joseph F. & Oberdabernig, Doris A. & Tomberger, Patrick, 2018. "Empirical estimates of the methane–income elasticity," Economics Letters, Elsevier, vol. 171(C), pages 137-139.
    12. Fernández-Amador, Octavio & Francois, Joseph & Oberdabernig, Doris & Tomberger, Patrick, 2018. "Economic growth, sectoral structures, and environmental methane footprints," Papers 1193, World Trade Institute.
    13. Fernández-Amador, Octavio & Oberdabernig, Doris & Tomberger, Patrick, 2017. "Testing for Convergence in Carbon Dioxide Emissions using a Bayesian Robust Structural Model," Papers 1101, World Trade Institute.
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    More about this item

    Keywords

    Economic development; CO2 emissions; Production-based inventories; Carbon footprint; Income-elasticity; Environmental Kuznets curve; Threshold estimation;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • 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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