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What Are the Carbon Emissions Elasticities for Income and Population? Bridging STIRPAT and EKC via robust heterogeneous panel estimates

Liddle, Brantley (2015): What Are the Carbon Emissions Elasticities for Income and Population? Bridging STIRPAT and EKC via robust heterogeneous panel estimates. Published in: Global Environmental Change , Vol. 31, (2015): pp. 62-73.

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Abstract

Knowledge of the carbon emissions elasticities of income and population is important both for climate change policy/negotiations and for generating projections of carbon emissions. However, previous estimations of these elasticities using the well-known STIRPAT framework have produced such wide-ranging estimates that they add little insight. This paper presents estimates of the STIRPAT model that address that shortcoming, as well as the issues of cross-sectional dependence, heterogeneity, and the nonlinear transformation of a potentially integrated variable, i.e., income. Among the findings are that the carbon emissions elasticity of income is highly robust; and that the income elasticity for OECD countries is less than one, and likely less than the non-OECD country income elasticity, which is not significantly different from one. By contrast, the carbon emissions elasticity of population is not robust; however, that elasticity is likely not statistically significantly different from one for either OECD or non-OECD countries. Lastly, the heterogeneous estimators were exploited to reject a Carbon Kuznets Curve: while the country-specific income elasticities declined over observed average income-levels, the trend line had a slight U-shape.

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