The Causal Factors of International Inequality In CO2 Emissions Per Capita: A Regression-Based Inequality Decomposition Analysis

Abstract

This paper uses the possibilities provided by the regression-based inequality decomposition (Fields, 2003) to explore the contribution of different explanatory factors to international inequality in CO2 emissions per capita. In contrast to previous emissions inequality decompositions, which were based on identity relationships (Duro and Padilla, 2006), this methodology does not impose any a priori specific relationship. Thus, it allows an assessment of the contribution to inequality of different relevant variables. In short, the paper appraises the relative contributions of affluence, sectoral composition, demographic factors and climate. The analysis is applied to selected years of the period 1993-2007. The results show the important (though decreasing) share of the contribution of demographic factors, as well as a significant contribution of affluence and sectoral composition.

Keywords: CO2 emissions, international emissions inequality, regression-based decomposition

JEL Classification: C19, D39, Q43