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CO2 emissions and economic activity: Short- and long-run economic determinants of scale, energy intensity and carbon intensity

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  • Andersson, Fredrik N.G.
  • Karpestam, Peter

Abstract

We analyze the short-term and the long-term determinants of energy intensity, carbon intensity and scale effects for eight developed economies and two emerging economies from 1973 to 2007. Our results show that there is a difference between the short-term and the long-term results and that climate policy are more likely to affect emission over the long-term than over the short-term. Climate policies should therefore be aimed at a time horizon of at least 8 years and year-on-year changes in emissions contains little information about the trend path of emissions. In the long-run capital accumulation is the main driver of emissions. Productivity growth reduces the energy intensity while the real oil price reduces both the energy intensity and the carbon intensity. The real oil price effect suggests that a global carbon tax is an important policy tool to reduce emissions, but our results also suggest that a carbon tax is likely to be insufficient decouple emission from economic growth. Such a decoupling is likely to require a structural transformation of the economy. The key policy challenge is thus to build new economic structures where investments in green technologies are more profitable.

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  • Andersson, Fredrik N.G. & Karpestam, Peter, 2013. "CO2 emissions and economic activity: Short- and long-run economic determinants of scale, energy intensity and carbon intensity," Energy Policy, Elsevier, vol. 61(C), pages 1285-1294.
  • Handle: RePEc:eee:enepol:v:61:y:2013:i:c:p:1285-1294 DOI: 10.1016/j.enpol.2013.06.004
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    Cited by:

    1. Feng Dong & Ruyin Long & Zhuolin Li & Yuanju Dai, 2016. "Analysis of carbon emission intensity, urbanization and energy mix: evidence from China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 82(2), pages 1375-1391, June.
    2. Nuno Carlos Leitão, 2014. "Economic Growth, Carbon Dioxide Emissions, Renewable Energy and Globalization," International Journal of Energy Economics and Policy, Econjournals, vol. 4(3), pages 391-399.
    3. Zilong Zhang & Bing Xue & Jiaxing Pang & Xingpeng Chen, 2016. "The Decoupling of Resource Consumption and Environmental Impact from Economic Growth in China: Spatial Pattern and Temporal Trend," Sustainability, MDPI, Open Access Journal, vol. 8(3), pages 1-13, February.
    4. repec:spr:nathaz:v:86:y:2017:i:3:d:10.1007_s11069-017-2747-0 is not listed on IDEAS
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    6. Alexandra Rese & Anke Kutschke & Daniel Baier, 2016. "Analyzing The Relative Influence Of Supply Side, Demand Side And Regulatory Factors On The Success Of Collaborative Energy Innovation Projects," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-43, February.
    7. Xu, Bin & Lin, Boqiang, 2016. "Assessing CO2 emissions in China’s iron and steel industry: A dynamic vector autoregression model," Applied Energy, Elsevier, pages 375-386.
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    9. Usman Khalid, 2016. "Catch-up in Institutional Quality: An Empirical Assessment," Discussion Papers 2016-04, University of Nottingham, CREDIT.

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    Keywords

    Economic growth; CO2 emissions; Short and long run;

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