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CO2-Emissions and Economic Growth - A bounds-testing cointegration analysis for German industries

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  • Parlow, Anton
  • von Hauff, Michael

Abstract

We model pollution as an input in the production process and test the long-run relationship between pollution and growth at the industry level. Most empirical studies, especially based on the environmental Kuznets curve, use highly aggregated data. Arguably, the results found may not be generalized for all industries in a given country. Using CO-2 emissions and GDP data for 47 industries observed over the period 1995-2010, we find a long-run relationship between pollution and growth only for a few German industries, e.g. the energy-generating-, the aviation- and agricultural industry. For these industries CO-2 emissions have a negative effect on growth, e.g. through environmental taxes and pollution allowances.

Suggested Citation

  • Parlow, Anton & von Hauff, Michael, 2014. "CO2-Emissions and Economic Growth - A bounds-testing cointegration analysis for German industries," MPRA Paper 55716, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:55716
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    References listed on IDEAS

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    More about this item

    Keywords

    Growth; GDP; CO2 Emissions; Pollution; Bounds-testing;
    All these keywords.

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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