Club Convergence of Carbon Intensity in OECD Countries: Evidence from Pre- and Post-Paris Agreement Subperiods

This study analyzes the convergence dynamics of carbon intensity across 38 OECD countries from 1985 to 2022 using the club convergence approach of Phillips & Sul (2007; 2009). The results reject panel-wide convergence and instead reveal a multi-club structure, ultimately consisting of three convergence clubs and a divergent group. To assess variation across climate policy regimes, the analysis is conducted for three subperiods: the pre-commitment period (1985-2003), the transition period (2004-2022), and the post-Paris Agreement period (2015-2022). The findings show that the early period is characterized by panel convergence, while the transition period shows no evidence of convergence. In the post-2015 period, convergence dynamics became more fragmented, reflected in an increase in divergent units and the persistence of multiple convergence clubs. These findings highlight that convergence patterns are not stable over time and vary significantly across policy regimes. Overall, the results indicate that common international climate commitments have not produced uniform convergence among OECD countries, underscoring the need for structurally differentiated and club-specific policy frameworks.