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

Parlow, Anton and von Hauff, Michael (2014): CO2-Emissions and Economic Growth - A bounds-testing cointegration analysis for German industries.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Growth, GDP, CO2 Emissions, Pollution, Bounds-testing
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

References

AG Energiebilanzen (2014) "Energieverbrauch in Deutschland in 2013", http://www.ag-energiebilanzen.de/index.php?article_id=29&fileName=ageb_jahresbericht2013_20140317.pdf, last accessed 04/11/2014

Bailey, Ian (2007) "Market Environmentalism, New Environmental Policy Instruments, and Climate Policy in the United Kingdom and Germany", Annals of the Association of American Geographers, Vol. 97 No.3, pp.530-550

Berliner Wasserbetriebe (2014) "Reduzierung von Stromverbrauch und Kohlendioxid", http://www.bwb.de/content/language1/html/1042.php, last accessed 04/14/2014

Blotnitz von, Harro and Curran Mary Ann (2007) "A review of assessments conducted on bio-ethanol as a transportation fuel from a net energy, greenhouse gas, and environmental life cycle perspective", Journal of Cleaner Production, Vol. 15 No.7, pp.607-619

Bockstael E. Nancy, and McConnell E. Kenneth (2007) "Chapter 9 - The Environment as an Input into Firm's Production", in Bockstael E. Nancy, and McConnell E. Kenneth "Environmental and resource valuation with revealed preferences: a theoretical guide to empirical models", Springer Netherlands, pp.289-334

Bovenberg, Lans, and Smulders Sjak (1995) "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model", Journal of Public Economics, Vol.57, pp.369-391

Brock A. William (1973) "Chapter 25 - A Polluted Golden Age", in Smith, V.L. "Economics of Natural and Environmental Resources" Gordon and Breach, New York, pp.441-461

Brock A. William (and Taylor M. Scott) (2005) "Chapter 28 - Economic Growth and the Environment: A Review of Theory and Empirics" in Philippe Aghion and Steven N. Durlauf "Handbook of Economic Growth", Volume 1, Part B, North-Holland, pp.1749-1821

Bundesministerium fuer Wirtschaft und Technologie (2013) "Energie in Deutschland - Trends und Hintergruende zur Energieversorgung", http://www.bmwi.de/Dateien/Energieportal/PDF/energie-in-deutschland, last accessed 04/11/2014

Chang Shu-Chen, and Chang Teng-Yu (2012) "Threshold Effects of Economic Growth on Air Pollution under Regimes of Corruption", Economic Bulletin, Vol. 32 No.1, pp.1046-1059

Dinda Soumyananda (2004) "Environmental Kuznets Curve Hypothesis: A Survey", Ecological Economics, Vol.49, pp.431-455

Drotloff Hansotto (2014) "Reduction of Emissions by Chemical Industry from the German Emission Control Act to the Industrial Emission Directive (IED)", Procedia Technology Vol. 12, pp. 637-642

Egli, Hannes (2004) "The Environmental Kuznets Curve - Evidence from Time Series Data for Germany", WIF Institute for Economic Research, Working Paper 03/28, http://www.cer.ethz.ch/research/wp_03_28.pdf, last accessed 08/04/2014

Engle Robert, and Granger Clive (1987) "Co-integration and error correction: Representation, estimation and testing", Econometrica, Vol. 55 No.2, pp.251-276

Erneuerbare-Energien-Gesetz (2000) "Gesetz zur Foerderung der Stromerzeugung aus erneuerbaren Energien sowie zur Aenderung des Mineraloelsteuergesetzes", Deutscher Bundestag, http://dip.bundestag.de/extrakt/14/019/14019287.html, last accessed 04/10/2014

Faaij Andre (2006) "Bio-energy in Europe: changing technology choices", Energy Policy, Vol.34 No.3, pp.322-342

Fujii, Hidemichi, and Managi, Shunsuke (2013) "Which industry is greener? An empirical study of nine industries in OECD countries", Energy Policy, Vol.57, pp.381-388

Gesetz zur Aenderung des Atomgesetzes (2011) "Dreizehnten Gesetzes zur Aenderung des Atomgesetzes", Deutscher Bundestag, http://dip21.bundestag.de/dip21/btd/17/062/1706246.pdf, last accessed 04/10/2014

Gruden Dusan (2008) "Umweltschutz in der Automobilindustrie - Motor, Kraftstoffe, Recycling", Vieweg + Teubner, Wiesbaden

Hauff von, Michael and Joerg Andrea (2013) "Nachhaltiges Wachstum", Oldenbourg Verlag, Muenchen, Germany

Hauff von, Michael (2014) "Nachhaltige Entwicklung: Grundlagen und Umsetzung ", 2nd edition (forthcoming), Oldenbourg Verlag, Muenchen, Germany

Lieb Christoph (2003) "The Environmental Kuznets Curve - A Survey of the Empirical Evidence and of Possible Causes", University of Heidelberg, Discussion Paper Series No.391

Ho S. Mun, and Jorgenson W. Dale (2007) "Sector Allocation of Emissions and Damage", in Mun S. Ho, and Chris P. Nielsen "Cleaning the air; the health and economic damages of air pollution in China", MIT Press, Cambridge, pp.279-330

Joerg Andrea (2007) "Die Beziehung von Wirtschaftswachstum und Umwelt: Eine umweltpolitische Implikation", Transfer-Verlag, Regensburg, Germany

Inlandsproduktberechnung (2012) "Inlandsproduktsberechnung - Detaillierte Jahresergebnisse - Fachserie 18 Reihe 1.4", https://www.destatis.de/DE/Publikationen/Thematisch/VolkswirtschaftlicheGesamtrechnungen/Inlandsprodukt/InlandsproduktsberechnungEndgueltigXLS_2180140.xlsx?__blob=publicationFile, last accessed 04/10/2014

Intergovernmental Panel on Climate Change (2014) "Climate Change 2013: The Physical Science Basis", http://www.climatechange2013.org/images/report/WG1AR5_ALL_FINAL.pdf, last accessed 04/11/2014

Jaennicke Martin (2012) "Green Growth: From a growing eco-industry to economic sustainability", Energy Policy, Vol.48, pp.13-21

Jochem, Eberhard and Eichhammer, Wolfgang (1999) "Chapter 12 - Voluntary agreements as an instrument to substitute regulating and economic instruments: Lessons from the German voluntary agreements on CO2 reduction" in Carlo Carraro and Francois Leveque "Voluntary Approaches in Environmental Policy", Kluwer Academic Publishing, Dordrecht, Netherlands

Johansen Soren (1991) "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models", Econometrica, Vol. 59 No.6, pp.1551-1580

Lehr Ulrike, Lutz Christian, and Edler Dietmar (2012) "Green jobs? Economic impacts of renewable energy in Germany", Energy Policy, Vol.47, pp.258-364

Lindmark Magnus, Bergquist Ann-Kristin, Andersson Lars Fredrik (2011) "Energy transition, carbon dioxide reduction and output growth in the Swedish pulp and paper industry: 1973-2006", Energy Policy, Vol.39, pp.5449-5456

Mayyas Ahmad, Qattawi Ala, Omar Mohammed, and Shan Dongri (2012) "Design for sustainability in automotive industry: A comprehensive review", Renewable and Sustainable Energy Reviews, Vol.16 No.4, pp.1845-1862

Martinez Pardo, Clara Ines (2009) "Energy efficiency developments in the manufacturing industries of Germany and Colombia, 1998-2005", Energy for Sustainable Development, Vol.13, pp.189-201

Mohtadi Hamid (1996) "Environment, Growth, and optimal policy design", Journal of Public Economics, Vol. 63, pp.119-140

Muller Z. Nicholas, Mendelsohn Robert, and Nordhaus William (2011) "Environmental Accounting for Pollution in the United States", American Economic Review, Vol.101 No.5, pp.1649-1675

Scheelhaase Janina, Grimme Wolfgang, and Schaefer Martin (2010) "The inclusion of aviation into the EU emission trading scheme - Impacts on competition between European and non-European network airlines", Transportation Research D, Vol.15, pp.14-25

Schleich Joachim, Eichhammer Wolfgang, Boede Ulla, Gagelmann Frank, Jochem Eberhard, Schlomann Barbara, and Ziesing Hans Joachim (2001) "Greenhouse gas reductions in Germany - lucky strike or hard work?", Climate Policy Vol.1 No.3, pp.363-380

Schreurs A. Miranda (2012) "Breaking the impasses in the international climate negotiations: The potential of green technologies", Energy Policy, Vol.48, pp.5-12

Statistisches Bundesamt (2008) "Klassifikationen der Wirtschaftszweige - Mit Erlaeuterungen", https://www.destatis.de/DE/Methoden/Klassifikationen/GueterWirtschaftklassifikationen/klassifikationwz2008_erl.pdf?__blob=publicationFile, last accessed 04/11/2014

Stern I. David (2004) "The Rise and Fall of the Environmental Kuznets Curve", World Development, Vol.32 No.8, pp.1419-1439

Stokey Nancy (1998) "Are there limits to growth", International Economic Review, Vol.39 No.1, pp.1-31

Umweltbundesamt (2003) "Verminderung diffuser Emissionen in der chemischen und Mineraloelindustrie", http://www.umweltbundesamt.de/sites/default/files/medien/publikation/long/2239.pdf, last accessed 04/14/2014

Umweltbundesamt (2012) "Umweltbelastungen der Landwirtschaft", http://www.umweltbundesamt.de/themen/boden-landwirtschaft/umweltbelastungen-der-landwirtschaft, last accessed 04/10/2014

Umweltbundesamt (2013) "Erneuerbare-Energien-Gesetz", http://www.umweltbundesamt.de/themen/klima-energie/erneuerbare-energien/erneuerbare-energien-gesetz, last accessed 04/10/2014

Umweltbundesamt (2014) "Treibhausgas-Emissionen in Deutschland - Emissionsentwicklung 1990 bis 2012", http://www.umweltbundesamt.de/daten/klimawandel/treibhausgas-emissionen-in-deutschland, last accessed 04/10/2014

Umweltgesamtrechnung (2013) "Umweltnutzung und Wirtschaft - Tabellen zu den Umweltoekonomischen Gesamtrechnungen", https://www.destatis.de/DE/Publikationen/Thematisch/UmweltoekonomischeGesamtrechnungen/Querschnitt/UmweltnutzungundWirtschaftTabellenband.html, last accessed 04/10/2014

Veolia (2014) "19 Prozent weniger CO2-Emissionen in der Wasserversorgung",http://www.veolia.de/medien/news/2013-10-01,51419.htm, last accessed 04/14/2014

Xepapadeas, Anastasios (2005) "Chapter 23 - Economic Growth and the Environment" in Maeler Karl-Goeran, and Vincent Jeffrey "Handbook of Environmental Economics - Economywide and International Environmental Issues", Vol.3, North-Holland, pp.1221-1271

Ziesing Hans-Joachim (1999) "CO2 emissions in Germany: Still not on the target trajectory", Economic Bulletin, Vol. 36 No.3, pp.13-20

Zhao Xiaoli, Ma Qian, and Yang Rui (2013) "Factors influencing CO2 emissions in China's power industry: Co-Integration analysis", Energy Policy, Vol. 57, pp.89-98