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Economic Growth, CO 2 Emissions Quota and Optimal Allocation under Uncertainty

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  • Chiu-Ming Hsiao

    (Department of Finance, College of Management, National Yunlin University of Science & Technology, Yunlin 64002, Taiwan)

Abstract

This study attempts to link greenhouse gas emissions and economic development, and under the premise of considering economic development, proposes an optimal quota of greenhouse gas emissions. Based on the environmental Kuznets curve hypothesis, the logarithmic value of greenhouse gas emissions is an inverted U-shaped function of the logarithmic value of GDP per capita. The empirical results showed that most countries in the world support the Kuznets curve hypothesis. Moreover, using data collected from Our World in Data, the optimal allocation of a greenhouse gas emissions quota can be found by minimizing the uncertainty risk subject to a prespecified global economic growth rate. For government policymakers, they may apply the framework in this study to determine an optimal allocation of greenhouse gas emissions for each sector that will ensure the intended level of domestic economic growth.

Suggested Citation

  • Chiu-Ming Hsiao, 2022. "Economic Growth, CO 2 Emissions Quota and Optimal Allocation under Uncertainty," Sustainability, MDPI, vol. 14(14), pages 1-26, July.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:14:p:8706-:d:864063
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    References listed on IDEAS

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    Cited by:

    1. Torok Laszlo, 2023. "Correlation of Greenhouse Gas Emissions with Economic Growth in the European Union (2010-2019)," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 102-110, July.

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