Revisiting carbon Kuznets curves with endogenous breaks modeling: evidence of decoupling and saturation (but few inverted-Us) for individual OECD countries

Abstract

This paper tests for a carbon Kuznets curve (CKC) by examining the carbon emissions per capita-GDP per capita relationship individually, for 21 OECD countries over 1870-2010 using a reduced-form, linear model that allows for multiple endogenously determined breaks. This approach addresses several important econometric and modeling issues, e.g., (i) it is highly flexible and can approximate complicated nonlinear relationships without presuming a priori any particular relationship; (ii) it avoids the nonlinear transformations of potentially nonstationary income. For 10 of 14 countries that were ultimately estimated, the uncovered emission-income relationship was either (i) decoupling-where income no longer affected emissions in a statistically significant way, (ii) saturation-where the emissions elasticity of income is declining, less than proportional, but still positive, or (iii) no transition-where the emissions elasticity of income is (or very near) unity. For only four countries did the emissions-income relationship become negative-i.e., a CKC. In concert with previous work, we conclude that the finding of a CKC is country-specific and that the shared timing among countries is important in income-environment transitions.

Nexus between green technology innovation, green financing, and CO2 emissions in the G7 countries: The moderating role of social globalisation

“…Although Chudik et al (2011) and Pesaran and Tosetti (2011) found that the CCEMG approach performed well with moderate and robust elements, it also demonstrated they could deal effectively with a wide range of global statistical shocks, such as oil price spillover effects and monetary concerns. CCEMG also has the advantage of removing spillover effects by considering the averages of both dependent and independent determinants that occur as a result of cross-sectional dependence (Liddle & Messinis, 2018). The technique of AGM, on the other hand, is an alternative approach to the CCEMG because, according to Eberhardt and Teal (2010), after dealing with the issues of heterogeneity, CD, and structural breaks, it also settles the time framework and deals with the unobservable elements of the data and considers this act as a dynamic process.…”

“…However, other independent variables are denoted by t (G i,t ). Furthermore, the average cross-sectional (X) is used to avoid the spillover effect produced by the presence of crosssectional dependence (Liddle & Messinis, 2018).…”

Revisiting Sulfur Kuznets Curves with Endogenous Breaks Modeling: Substantial Evidence of Inverted-Us/Vs for Individual OECD Countries

“…This substantial evidence of inverted-Us for sulfur provides an interesting contrast to Liddle and Messinis (2014), who analyzed the income-carbon relationship for OECD countries employing the same methods used here. Liddle and Messinis found evidence of inverted-Us for carbon for only four of the 23 OECD countries they considered.…”

Economic Growth and Carbon Emissions: The Road to ‘Hothouse Earth’ is Paved with Good Intentions

“…Many others have highlighted similar trends, including (recently) Hatfield-Dodds et al (2015) for Australia; Apergis (2016) for 15 OECD countries during 1960OECD countries during -2013Shuai et al (2017) for a panel of 164 countries; Liddle and Messinis (2018) for 21 OECD countries (during 1870-2010); Apergis, Christou, and Gupta (2017) for U.S. states; and Wagner, Grabarczyk, and Hong (2020) for Austria, Belgium, Finland, the Netherlands, Switzerland and the U.K. 5 Likewise, the International Energy Agency (IEA) has argued-albeit on the basis of just three years of data 2014-2016-that global carbon emissions (which remained stable) have decoupled from economic growth (IEA 2016). The World Resources Institute, a climate think-tank based in Washington D.C., reports that as many as 21 countries (mostly belonging to the OECD) managed to reduce their (territorial) carbon emissions while growing their GDP in the period 2000 to 2014 (Aden 2016); these 21 countries should be role models for the rest of the world.…”