Munich Personal RePEc Archive

Production Technology and Carbon Emission: Long run relation with Short run Dynamics

Dinda, Soumyananda (2018): Production Technology and Carbon Emission: Long run relation with Short run Dynamics. Published in: Journal of Applied Economics , Vol. 21, No. 1 (28 November 2018): pp. 106-121.

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What is the role of technological progress on reduction of CO2 emission? Question of linkage among carbon emission, income and technological progress is the main focuses on recent research area. Using vector error correction model (VECM), this paper investigates the long run relation with short run dynamics among CO2 emission, technological progress and economic growth. This study observes a specific kind of causality running from technological progress to CO2 emission in the USA during 1963 – 2010, while past income is the cause of rising carbon emission. Policy makers should emphasis on R & D for updated production technology which helps to reduce CO2 emission with raising income. Technological progress is the central force that causes income growth as well as emission reduction. Continuous change and adaption of new and updated technology is the main driving force toward sustainable development.

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