Carbon Emissions and Economic Growth: Production-Based versus Consumption-Based Evidence on Decoupling

34 Pages Posted: 30 Apr 2016 Last revised: 2 May 2016

See all articles by Goher-Ur-Rehman Mir

Goher-Ur-Rehman Mir

Ecofys

Servaas Storm

Delft University of Technology - Department of Economics

Date Written: April 1, 2016

Abstract

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

Mir, Goher-Ur-Rehman and Storm, Servaas, Carbon Emissions and Economic Growth: Production-Based versus Consumption-Based Evidence on Decoupling (April 1, 2016). Institute for New Economic Thinking Working Paper Series No. 41, Available at SSRN: https://ssrn.com/abstract=2772131 or http://dx.doi.org/10.2139/ssrn.2772131

Goher-Ur-Rehman Mir

Ecofys ( email )

Stadsplateau 2
3526 KL
Utrecht, 3521 AZ
Netherlands

Servaas Storm (Contact Author)

Delft University of Technology - Department of Economics ( email )

Jaffalaan 5
2628 EB Delft
Netherlands
31-15-2783548 (Phone)
31-15-2783480 (Fax)

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