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GTAP Resource #4417

"Revisiting the Environmental Kuznets Curve"
by Fernandez-Amador, Octavio, Joseph Francois and Patrick Tomberger

The view that human released CO2 emissions are one of the main causes of anthropogenic global warming is now widespread among the scienti c community. Ranging from rising sea levels to land and water shortages the e ects of climate change on the global ecosystem and the world economy will be severe. This makes the existence of a U-shaped relationship between economic development and pollution the Holy Grail of environmental economics. While there is theoretical support for this so called Environmental Kuznets Curve (EKC), epirical evidence is far from robust, sometimes even contradicting theoretical suggestions. Here we test for the existence of an inverted U-shaped relationship between carbon dioxide emissions and real income for a panel of 78 individuals (66 countries and 12 composite regions) for the years 1997, 2001, 2004 and 2007. We contribute to the literature in two ways. First, by applying multi-region input output (MRIO) methodology on the GTAP database we can also take CO2 consumption into account besides established production-based measures. Secondly, we also apply a threshold model alongside conventional lniear models on our dataset. Applying the linear models we can adress methodological issues of the existing literature. Our results show a linear relationship between real income and the production and consumption of CO2 emissions. We have some support for the hypothesis that consumption of CO2 is indeed increasing with income, which we want to testify with an threshold approach. The existence or non-existence of an EKC for CO2 is of considerable importance of the design of global mitigation mechanisms and agreements on climate change. ...

Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal
Date: 2014
Created: Tomberger, P. (4/14/2014)
Updated: Tomberger, P. (4/14/2014)
Visits: 1,330
- Climate change policy
- Climate impacts
- Trade and the environment

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