Economic growth and carbon emissions

Paresh Kumar Narayan, Behnaz Saboori, Abdorreza Soleymani

Research output: Contribution to journalArticleResearchpeer-review

93 Citations (Scopus)

Abstract

In this paper, we investigate the dynamic relationship between economic growth and carbon dioxide (CO2) emissions for 181 countries. We propose a new approach based on the cross-correlation estimates to understand how economic growth and CO2 emissions are related. Our proposal is that if there is a positive cross-correlation between the current level of income and the past level of CO2 emissions and a negative cross-correlation between the current level of income and the future CO2 emissions, then CO2 emissions will decline with an increase in income over time, consistent with the environmental Kuznets curve (EKC) hypothesis. Our main findings can be summarized as follows. First, for 21 out of 181 countries (12%), there is clear evidence supporting the EKC hypothesis. Second, we ask whether a rise in income reduces emissions in the future. We find that for 49 countries (27%), income growth will reduce emissions in the future.

Original languageEnglish
Pages (from-to)388-397
Number of pages10
JournalEconomic Modelling
Volume53
DOIs
Publication statusPublished - Feb 2016
Externally publishedYes

Keywords

  • CO emissions
  • Cross-correlation
  • Economic growth

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