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The Stochastic Convergence of CO2 Emissions: A Long Memory Approach

  • Marco R Barassi
  • Matthew A Cole
  • Robert J R Elliott

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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Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 10-32.

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Length: 22 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:bir:birmec:10-32
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  1. Marco Barassi & Matthew Cole & Robert Elliott, 2008. "Stochastic Divergence or Convergence of Per Capita Carbon Dioxide Emissions: Re-examining the Evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(1), pages 121-137, May.
  2. Shimotsu, Katsumi & Phillips, Peter C.B., 2006. "Local Whittle estimation of fractional integration and some of its variants," Journal of Econometrics, Elsevier, vol. 130(2), pages 209-233, February.
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  15. John A. List, 1999. "Have Air Pollutant Emissions Converged Among U.S. Regions? Evidence from Unit Root Tests," Southern Economic Journal, Southern Economic Association, vol. 66(1), pages 144-155, July.
  16. Aldy, Joseph, 2005. "Per Capita Carbon Dioxide Emissions: Convergence or Divergence?," Discussion Papers dp-05-53, Resources For the Future.
  17. Michael L. Nieswiadomy & Mark C. Strazicich, 2004. "Are Political Freedoms Converging?," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 323-340, April.
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