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The Stochastic Convergence of CO 2 Emissions: A Long Memory Approach

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  • Marco Barassi

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  • Matthew Cole
  • Robert Elliott

Abstract

In response to equity concerns surrounding the spatial distribution of CO2 emissions and the assumptions of CO2 convergence within some climate models, this paper examines the convergence of CO2 emissions within the OECD over the period 1870-204. More specifically, using the Local Whittle estimator and its variants we examine whether relative per capita CO2 emissions are fractionally integrated, that is they are long memory processes which, although highly persistant, may revert to the mean/trend in the long run. Our results suggest that CO2 emissions within 13 out of 18 OECD countries are indeed fractionally integrated implying that they converge over time, albeit slowly. Interestingly though, the countries whose emissions are not found to be fractionally integrated are some of the highest polluters within the OECD, at least in per capita terms. Our results have implications both for future studies of CO2 convergence and for climate policy.
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Suggested Citation

  • Marco Barassi & Matthew Cole & Robert Elliott, 2011. "The Stochastic Convergence of CO 2 Emissions: A Long Memory Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(3), pages 367-385, July.
  • Handle: RePEc:kap:enreec:v:49:y:2011:i:3:p:367-385
    DOI: 10.1007/s10640-010-9437-7
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    Cited by:

    1. Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-138, Winter.
    2. Juan Antonio Duro & Jordi Teixidó-Figueras & Emilio Padilla, 2014. "The causal factors of international inequality in co2 emissions per capita: a regression-based inequality decomposition analysis," Working Papers 2014/20, Institut d'Economia de Barcelona (IEB).
    3. Belbute, José M. & Pereira, Alfredo M., 2015. "An alternative reference scenario for global CO2 emissions from fuel consumption: An ARFIMA approach," Economics Letters, Elsevier, vol. 136(C), pages 108-111.
    4. Ghosh, Madhusudan & Ghoshray, Atanu & Malki, Issam, 2013. "Regional divergence and club convergence in India," Economic Modelling, Elsevier, vol. 30(C), pages 733-742.
    5. Chang, Chun-Ping & Wen, Jun & Dong, Minyi & Hao, Yu, 2018. "Does government ideology affect environmental pollutions? New evidence from instrumental variable quantile regression estimations," Energy Policy, Elsevier, vol. 113(C), pages 386-400.
    6. Duro, Juan Antonio, 2013. "International mobility in carbon dioxide emissions," Energy Policy, Elsevier, vol. 55(C), pages 208-216.
    7. Ahmed, Mumtaz & Khan, Atif Maqbool & Bibi, Salma & Zakaria, Muhammad, 2017. "Convergence of per capita CO2 emissions across the globe: Insights via wavelet analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 86-97.
    8. Dayong Zhang and David C. Broadstock, 2016. "Club Convergence in the Energy Intensity of China," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    9. Shahbaz, Muhammad & Khraief, Naceur & Hammoudeh, Shawkat, 2019. "How Do Carbon Emissions Respond to Economic Shocks? Evidence from Low-, Middle- and High-Income Countries," MPRA Paper 93976, University Library of Munich, Germany, revised 15 May 2019.
    10. Apergis, Nicholas & Payne, James E., 2017. "Per capita carbon dioxide emissions across U.S. states by sector and fossil fuel source: Evidence from club convergence tests," Energy Economics, Elsevier, vol. 63(C), pages 365-372.
    11. Ghassen El-Montasser & Roula Inglesi-Lotz & Rangan Gupta, 2015. "Convergence of greenhouse gas emissions among G7 countries," Applied Economics, Taylor & Francis Journals, vol. 47(60), pages 6543-6552, December.
    12. Camarero, Mariam & Picazo-Tadeo, Andrés J. & Tamarit, Cecilio, 2013. "Are the determinants of CO2 emissions converging among OECD countries?," Economics Letters, Elsevier, vol. 118(1), pages 159-162.
    13. Karakaya, Etem & Yılmaz, Burcu & Alataş, Sedat, 2018. "How Production Based and Consumption Based Emissions Accounting Systems Change Climate Policy Analysis: The Case of CO2 Convergence," MPRA Paper 88781, University Library of Munich, Germany.
    14. Fallahi, Firouz, 2017. "Stochastic convergence in per capita energy use in world," Energy Economics, Elsevier, vol. 65(C), pages 228-239.
    15. Mishra, Vinod & Smyth, Russell, 2017. "Conditional convergence in Australia's energy consumption at the sector level," Energy Economics, Elsevier, vol. 62(C), pages 396-403.
    16. Luis A. Gil-Alana & Tommaso Trani, 2019. "Time Trends and Persistence in the Global CO2 Emissions Across Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 213-228, May.
    17. José M. Belbute & Alfredo Marvão Pereira, 2016. "Updated Reference Forecasts for Global CO2 Emissions from Fossil-Fuel Consumption," Working Papers 170, Department of Economics, College of William and Mary.
    18. repec:bla:wireae:v:6:y:2017:i:3:p:n/a-n/a is not listed on IDEAS
    19. José M. Belbute & Alfredo Marvão Pereira, 2016. "Do Global CO2 Emissions from Fossil-Fuel Consumption Exhibit Long Memory? A Fractional Integration Analysis," Working Papers 165, Department of Economics, College of William and Mary.
    20. Chao Bao & Hongjie Wang, 2019. "Trans-Provincial Convergence of per Capita Energy Consumption in Urban China, 1990–2015," Sustainability, MDPI, Open Access Journal, vol. 11(5), pages 1-15, March.
    21. Octavio Fernández-Amador & Doris A. Oberdabernig & Patrick Tomberger, 2019. "Testing for Convergence in Carbon Dioxide Emissions Using a Bayesian Robust Structural Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1265-1286, August.
    22. José Belbute & Alberto Marvão Pereira, 2015. "Do Global CO2 Emissions from Fuel Consumption Exhibit Long Memory? A Fractional Integration Analysis," CEFAGE-UE Working Papers 2015_14, University of Evora, CEFAGE-UE (Portugal).
    23. James E. Payne & Stephanie Miller & Junsoo Lee & Myeong Hyeon Cho, 2014. "Convergence of per capita sulphur dioxide emissions across US states," Applied Economics, Taylor & Francis Journals, vol. 46(11), pages 1202-1211, April.
    24. Juan Antonio Duro & Jordi Teixidó-Figueras & Emilio Padilla Rosa, 2014. "The causal factors of international inequality in CO2 emissions per capita: A regression-based inequality decomposition analysis," Working Papers wpdea1402, Department of Applied Economics at Universitat Autonoma of Barcelona.

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