Abstract
The aim of this paper is to augment the existing literature on convergence of CO2 emissions, by adding carbon footprint per capita and ecological footprint per capita to the convergence debate. We use the residual augmented least squares regression to examine the stochastic convergence of the environmental indices in 27 OECD countries. Furthermore, in contrast to the previous studies which mainly used the conventional beta-convergence approach to examine conditional convergence, we use a beta-convergence method that is capable of identifying the actual number of countries that contribute to conditional convergence. The sigma-convergence of the environmental indices is also examined. The results suggest that conditional convergence exists in 12 countries for CO2 emissions per capita, 15 countries for carbon footprint per capita and also 13 countries for ecological footprint per capita. There is evidence for sigma-convergence for all the three indicators. The policy implications of the results are discussed in the body of the paper.
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Notes
The carbon footprint is conceptually close to the CO2 emission provided by the World Bank as both involve carbon emissions. However, the methodologies employed in the calculation of the two indexes are different. Moreover, carbon footprint is expressed in terms of hectares of land.
The OECD bloc is dominated by developed and high-income countries.
Australia, Austria, Belgium, Canada, Chile, Denmark, France, Greece, Hungary, Ireland, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, South Korea, Spain, Sweden, Switzerland, Turkey, UK and USA.
Although the data for CO2 emissions per capita started in 1960, we are focussing on 1961–2013 because the data for both carbon footprint and ecological footprint started in 1961.
However, one of the issues with sigma-convergence is that it cannot effectively disclose the country that contributes to the convergence or otherwise of the series, which can be resolved by using the beta-convergence approach of Tomljanovich and Vogelsang (2002).
The estimation is derived from the following equation:
\( \ln \left(\frac{EMISSIO{N}_{it}}{EMISSIO{N}_{i\mathrm{t}-\tau }}\right)=\alpha +\beta \ln \left( EMISSIO{N}_{i\mathrm{t}-\tau}\right)+{\varepsilon}_{it} \)
where EMISSIONi is the per capita CO2 emissions (ecological footprint or carbon footprint) in a given country; subscript t represents the end of the time period under investigation; and t − τ is the start of the time period. If the coefficient of β is negative and significant, there is evidence for β-convergence in the per capita CO2 emissions (ecological footprint or carbon footprint).
According to this approach, a structural break is assumed to exist at a particular date, if either the intercept or the linear trend or both at that particular date is significant at 10%.
In the estimation process, we only selected the intercept, linear trend or the dummy variable with significant t-statistics, which is in line with the paper of Cuñado and De Gracia (2006).
The only difference we observed for structural breaks between LM and RALS-LM test is the case of Japan. According to the LM test, there is one structural break for Japan, which was in 1991.
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Solarin, S.A. Convergence in CO 2 emissions, carbon footprint and ecological footprint: evidence from OECD countries . Environ Sci Pollut Res 26, 6167–6181 (2019). https://doi.org/10.1007/s11356-018-3993-8
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DOI: https://doi.org/10.1007/s11356-018-3993-8