Modeling the emissions–income relationship using long-run growth rates

Abstract

The authors adopt a new approach to modeling the relationship between emissions and income using long-run per capita growth rates. This approach allows them to test multiple hypotheses about the drivers of per capita emissions in a single framework and avoid several of the econometric issues that have plagued the environmental Kuznets curve literature. They estimate models for carbon and sulfur dioxide emissions. They can reject restricted models that omit either growth or beta convergence effects. Although the term representing the environmental Kuznets effect is statistically significant for per capita carbon and sulfur dioxide emissions, the estimated income per capita turning points are out of the sample for the full data set.