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The long-run decoupling of emissions and output: Evidence from the largest emitters

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  • Cohen, Gail
  • Jalles, Joao Tovar
  • Loungani, Prakash
  • Marto, Ricardo

Abstract

For the world's 20 largest emitters, we use a simple trend/cycle decomposition to provide evidence of decoupling between greenhouse gas emissions and output in richer nations, particularly in European countries, but not yet in emerging markets. If consumption-based emissions—measures that account for countries' net emissions embodied in cross-border trade—are used, the evidence for decoupling in the richer economies gets weaker. Countries with underlying policy frameworks more supportive of renewable energy and climate change mitigation efforts tend to show greater decoupling between trend emissions and trend GDP, and for both production- and consumption-based emissions. The relationship between trend emissions and trend GDP has also become much weaker in the last two decades than in preceding decades.

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  • Cohen, Gail & Jalles, Joao Tovar & Loungani, Prakash & Marto, Ricardo, 2018. "The long-run decoupling of emissions and output: Evidence from the largest emitters," Energy Policy, Elsevier, vol. 118(C), pages 58-68.
  • Handle: RePEc:eee:enepol:v:118:y:2018:i:c:p:58-68
    DOI: 10.1016/j.enpol.2018.03.028
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    3. Gozgor, Giray & Tiwari, Aviral Kumar & Khraief, Naceur & Shahbaz, Muhammad, 2019. "Dependence structure between business cycles and CO2 emissions in the U.S.: Evidence from the time-varying Markov-Switching Copula models," Energy, Elsevier, vol. 188(C).
    4. Cohen, Gail & Jalles, Joao Tovar & Loungani, Prakash & Marto, Ricardo & Wang, Gewei, 2019. "Decoupling of emissions and GDP: Evidence from aggregate and provincial Chinese data," Energy Economics, Elsevier, vol. 77(C), pages 105-118.
    5. Jalles, Joao Tovar & Ge, Jun, 2020. "Emissions and economic development in commodity exporting countries," Energy Economics, Elsevier, vol. 85(C).
    6. Kimon Keramidas & Stephane Tchung-Ming & Ana Raquel Diaz-Vazquez & Matthias Weitzel & Toon Vandyck & Jacques Despres & Andreas Schmitz & Luis Rey Los Santos & Krzysztof Wojtowicz & Burkhard Schade & B, 2018. "Global Energy and Climate Outlook 2018: Sectoral mitigation options towards a low-emissions economy," JRC Working Papers JRC113446, Joint Research Centre (Seville site).
    7. Stefan Mittnik & Willi Semmler & Alexander Haider, 2020. "Climate Disaster Risks—Empirics and a Multi-Phase Dynamic Model," Econometrics, MDPI, Open Access Journal, vol. 8(3), pages 1-27, August.
    8. Leal, Patrícia Alexandra & Marques, António Cardoso & Fuinhas, José Alberto, 2019. "Decoupling economic growth from GHG emissions: Decomposition analysis by sectoral factors for Australia," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 12-26.
    9. Igor Makarov, 2018. "Discrepancies Between Environmental Kuznets Curves For Production- And Consumption-Based Co2 Emissions," HSE Working papers WP BRP 199/EC/2018, National Research University Higher School of Economics.
    10. Jalles, Joao Tovar, 2019. "Crises and emissions: New empirical evidence from a large sample," Energy Policy, Elsevier, vol. 129(C), pages 880-895.
    11. Balsalobre-Lorente, Daniel & Driha, Oana M. & Bekun, Festus & Sinha, Avik & Fatai Adedoyin, Festus, 2020. "Consequences of COVID-19 on the social isolation of the Chinese economy: accounting for the role of reduction in carbon emissions," MPRA Paper 102894, University Library of Munich, Germany, revised 2020.
    12. Neofytou, H. & Nikas, A. & Doukas, H., 2020. "Sustainable energy transition readiness: A multicriteria assessment index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    13. Sheng, Pengfei & Li, Jun & Zhai, Mengxin & Huang, Shoujun, 2020. "Coupling of economic growth and reduction in carbon emissions at the efficiency level: Evidence from China," Energy, Elsevier, vol. 213(C).
    14. Yilmaz Bayar & Marius Dan Gavriletea, 2019. "Energy efficiency, renewable energy, economic growth: evidence from emerging market economies," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2221-2234, July.
    15. Engelke, Carola & Heinisch, Katja & Schult, Christoph, 2019. "How forecast accuracy depends on conditioning assumptions," IWH Discussion Papers 18/2019, Halle Institute for Economic Research (IWH).
    16. Yijia Huang & Jiaqi Zhang & Jinqun Wu, 2020. "Integrating Sustainability Assessment into Decoupling Analysis: A Focus on the Yangtze River Delta Urban Agglomerations," Sustainability, MDPI, Open Access Journal, vol. 12(19), pages 1-20, September.
    17. Carlos Scheel & Eduardo Aguiñaga & Bernardo Bello, 2020. "Decoupling Economic Development from the Consumption of Finite Resources Using Circular Economy. A Model for Developing Countries," Sustainability, MDPI, Open Access Journal, vol. 12(4), pages 1-21, February.
    18. John Gibson & Garth Heutel, 2020. "Pollution and Labor Market Search Externalities Over the Business Cycle," NBER Working Papers 27445, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Emissions; Environmental Okun's Law; Environmental Kuznets Curve;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • 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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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