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Hidden regimes and the demand for carbon dioxide from motor-gasoline

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  • Roach, Travis

Abstract

Perhaps the most tactile source of anthropogenic carbon dioxide (CO2) emissions stem from vehicle-use. Because consumers are well aware of their price and quantity decisions it is likely that consumer demand for CO2 emissions from motor-gasoline are quite responsive to the overall state of the economy. Using a structurally identified Markov-switching demand model I find that CO2 emissions respond asymmetrically to changes in income and the price of gasoline in expansionary and contracting states of the economy. The findings of this paper indicate that flexible policy instruments have the potential to mitigate undue burden on consumers and producers compared to their static counterparts.

Suggested Citation

  • Roach, Travis, 2015. "Hidden regimes and the demand for carbon dioxide from motor-gasoline," Energy Economics, Elsevier, vol. 52(PB), pages 306-315.
    • Handle: RePEc:eee:eneeco:v:52:y:2015:i:pb:p:306-315
    DOI: 10.1016/j.eneco.2015.09.014
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    1. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Hammoudeh, Shawkat & Shahzad, Syed Jawad Hussain, 2017. "Bounds Testing Approach to Analyzing the Environment Kuznets Curve Hypothesis: The Role of Biomass Energy Consumption in the United States with Structural Breaks," MPRA Paper 81840, University Library of Munich, Germany, revised 07 Oct 2017.

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    More about this item

    Keywords

    Carbon dioxide; Markov switching; Motor-gasoline;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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