Stochastic convergence of per capita greenhouse gas emissions: New unit root tests with breaks and a factor structure

James Payne, Junsoo Lee (), Md. Towhidul Islam and Saban Nazlioglu

Energy Economics, 2022, vol. 113, issue C

Abstract: This study examines the convergence of per capita greenhouse gas emissions for a global panel of 183 countries. Unlike previous studies that address the effects of structural breaks and cross-correlations separately, a new testing approach is proposed that jointly incorporates structural breaks and cross-correlations. Specifically, we extend the two break tests of Lee and Strazicich (2003) to allow for cross-correlations in a factor structure by adopting the PANIC procedure of Bai and Ng (2004). When accounting for structural breaks and factors, our results show that the evidence of stochastic convergence in greenhouse gas emissions is quite limited compared to other unit root tests that fail to account for cross-correlations. Policy implications of the findings are also discussed.

Keywords: Greenhouse gas emissions; Structural breaks; Cross-correlations; PANIC; Panel; Stochastic convergence (search for similar items in EconPapers)
JEL-codes: C12 C23 F31 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:113:y:2022:i:c:s0140988322003516

DOI: 10.1016/j.eneco.2022.106201

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