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Carbon Dioxide Emissions and Economic Growth: An Assessment Based on Production and Consumption Emission Inventories

Octavio Fernández-Amador (), Joseph Francois, Doris Oberdabernig and Patrick Tomberger

Ecological Economics, 2017, vol. 135, issue C, 269-279

Abstract: Working with a new dataset on comparable global CO2 production and consumption inventories spanning the 1997–2011 period, we investigate the relationship between real gross domestic product (GDP) per capita and CO2 emissions per capita associated with both production and consumption activities. By including linkages between production-based emissions in one country and final consumption in another (via cross-border value chains), we focus on the entire carbon chain. We estimate polynomial and threshold models, accounting for reverse causality and identification problems. We find that the income-elasticity for both inventories is regime-dependent and reflects small carbon efficiency gains from economic development. Carbon footprints show larger income-elasticities, while national policy instruments targeting production can clearly be circumvented by carbon embodied in intermediate trade. This implies problems of environmental sustainability that may require consumption-based policy instruments.

Keywords: Economic development; CO2 emissions; Production-based inventories; Carbon footprint; Income-elasticity; Environmental Kuznets curve; Threshold estimation (search for similar items in EconPapers)
JEL-codes: F18 F64 O44 Q54 Q56 (search for similar items in EconPapers)
Date: 2017
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