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

Liddle, Brantley and Messinis, George (2014): 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 23 OECD countries over 1950-2010 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 15 of 23 countries studied, the uncovered emission-income relationship was either (i) decoupling—where income no longer affected emissions in a statistically significant way, or (ii) saturation—where the emissions elasticity of income is declining, less than proportional, but still positive. 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.

• Item Type: MPRA Paper
• Language: English
• Keywords: CO2 emissions; Environmental Kuznets curve; OECD countries; nonlinear flexible form; multiple endogenous breaks; income-emissions elasticities
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy; 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

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