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First in, First out: Econometric Modelling of UK Annual CO_2 Emissions, 1860–2017

Author

Listed:
  • David F. Hendry

    (Institute for New Economic Thinking at the Oxford Martin School and Climate Econometrics, Nuffield College, University of Oxford)

Abstract

The United Kingdom was the first country into the Industrial Revolution in the mid-18th Century. 250 years later, real income levels in the UK are about 7-10 fold higher per capita, even greater elsewhere, many killer diseases have been tamed, and longevity has approximately doubled. However, such beneficial developments have led to a global explosion in anthropogenic emissions of greenhouse gases. Following the Climate Change Act of 2008, the UK is now one of the first countries out, with annual CO_2 emissions per capita below 1860’s levels. We develop an econometric model of its highly non-stationary emissions process over the last 150 years, confirming the key roles of reduced coal use and of the capital stock, which embodies the vintage of technology at its construction. Major shifts and outliers must be handled to develop a viable model, and the advantages of doing so are detecting the impacts of important policies and improved forecasts. Large reductions in all CO_2 sources will be required to meet the 2050 target of an 80% reduction from 1970 levels, and their near elimination for a net-zero level.

Suggested Citation

  • David F. Hendry, 2020. "First in, First out: Econometric Modelling of UK Annual CO_2 Emissions, 1860–2017," Economics Papers 2020-W02, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:econwp:2002
    as

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    File URL: https://www.nuffield.ox.ac.uk/economics/Papers/2020/2020W02_CO2UKEmissionsModel20.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    UK CO2 Emissions; Model Selection; Saturation Estimation; Autometrics; Climate Change Act; Climate Policy Implications.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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