Carbon Emissions and Economic Growth: Production-Based versus Consumption-Based Evidence on Decoupling
34 Pages Posted: 30 Apr 2016 Last revised: 2 May 2016
Date Written: April 1, 2016
We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries (and 35 industries) during 1995-2007 from the World Input Output Database (WIOD). The estimates for per capita CO2 emissions are truly comprehensive as these include all carbon emissions embodied in international trade and global commodity chains. Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption based CO2 emissions are monotonically increasing with per capita GDP. We draw out the implications of these findings for climate policy and binding emission reduction obligations.
Keywords: Carbon Kuznets Curve; Climate change; Economic growth; Production-based CO2 emissions, Consumption-based CO2 emissions; Decoupling
JEL Classification: F64, Q54, Q55, Q56
Suggested Citation: Suggested Citation