Asymmetric effects of the business cycle on carbon dioxide emissions
Energy Economics, 2017, vol. 61, issue C, 289-297
Long-term carbon dioxide emissions forecasts rely on the assumption that the economic growth rate is constant over long time horizons and exclude the business cycle, thereby ignoring a fundamental component of the macroeconomy. This paper considers how the business cycle affects emissions forecasts and shows the implicit assumption in current forecasts, that the elasticity of emissions is constant with respect to GDP, is wrong. In the United States, emissions fall more sharply when GDP declines than they rise when GDP increases. This is partly due to a decrease in industrial energy intensity as GDP declines. A simulation shows that accounting for the business cycle results in 5% lower cumulative emissions through 2050 relative to the baseline forecast.
Keywords: Energy; Business cycles; Climate change (search for similar items in EconPapers)
JEL-codes: E32 Q43 Q54 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:61:y:2017:i:c:p:289-297
Access Statistics for this article
Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant
More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().