[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/lsg/lsgwps/wp116.html
   My bibliography  Save this paper

Emissions-GDP Relationship in Times of Growth and Decline

Author

Listed:
  • Baran Doda
Abstract
This empirical paper focuses on the relationship between changes in GDP and CO2 emissions as a country�s economy moves through periods of growth and decline. Using a comprehensive panel, I document substantial heterogeneity in the relationship across countries. Specifically, countries can be classi?ed into one of the following three groups. Group D (for decline) includes countries where the emissions growth rate is more strongly associated with the GDP growth rate in periods of GDP decline than in periods of GDP growth. Group G (for growth) includes countries where the degree of association is stronger in periods of GDPgrowth. Finally, in group S (for symmetrical) it is not possible to reject the hypothesis that the relationship is the same for growth and decline. According to a simple count criterion, approximately a third of the countries in the sample fall into each group. Notably, China and the US, currently the world�s largest emitters by a substantial margin, are in group D. These results have potentially important consequences for long-term emissions projections. They also suggest that macroeconomic stabilization policies may have adverse emissions consequences by limiting the cleansing e?ect of periods in which GDP declines.

Suggested Citation

  • Baran Doda, 2013. "Emissions-GDP Relationship in Times of Growth and Decline," GRI Working Papers 116, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp116
    as

    Download full text from publisher

    File URL: http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/02/WP116-emissions-gdp-growth-and-decline.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fischer, Carolyn & Springborn, Michael, 2011. "Emissions targets and the real business cycle: Intensity targets versus caps or taxes," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 352-366.
    2. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    3. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
    4. Frank Jotzo & Paul J. Burke & Peter J. Wood & Andrew Macintosh & David I. Stern, 2012. "Decomposing the 2010 global carbon dioxide emissions rebound," Nature Climate Change, Nature, vol. 2(4), pages 213-214, April.
    5. Baran Doda, 2012. "Evidence on CO2 emissions and business cycles," GRI Working Papers 78, Grantham Research Institute on Climate Change and the Environment.
    6. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Torben Klarl, 2019. "The response of CO2 emissions to the business cycle: New evidence for the U.S," Bremen Papers on Economics & Innovation 1902, University of Bremen, Faculty of Business Studies and Economics.
    2. Klarl, Torben, 2020. "The response of CO2 emissions to the business cycle: New evidence for the U.S," Energy Economics, Elsevier, vol. 85(C).
    3. Paul J. Burke & Md Shahiduzzaman & David I. Stern, 2015. "Carbon dioxide emissions in the short run: The rate and sources of economic growth matter," CAMA Working Papers 2015-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Sheldon, Tamara L., 2017. "Asymmetric effects of the business cycle on carbon dioxide emissions," Energy Economics, Elsevier, vol. 61(C), pages 289-297.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carolyn Fischer & Garth Heutel, 2013. "Environmental Macroeconomics: Environmental Policy, Business Cycles, and Directed Technical Change," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 197-210, June.
    2. Gozgor, Giray & Tiwari, Aviral Kumar & Khraief, Naceur & Shahbaz, Muhammad, 2019. "Dependence structure between business cycles and CO2 emissions in the U.S.: Evidence from the time-varying Markov-Switching Copula models," Energy, Elsevier, vol. 188(C).
    3. Sheldon, Tamara L., 2017. "Asymmetric effects of the business cycle on carbon dioxide emissions," Energy Economics, Elsevier, vol. 61(C), pages 289-297.
    4. Khan, Hashmat & Metaxoglou, Konstantinos & Knittel, Christopher R. & Papineau, Maya, 2019. "Carbon emissions and business cycles," Journal of Macroeconomics, Elsevier, vol. 60(C), pages 1-19.
    5. Shahbaz, Muhammad & Abosedra, Salah & Kumar, Mantu & Abbas, Qaisar, 2020. "Environmental Consequence of Transportation Sector for USA: The Validation of Transportation Kuznets Curve," MPRA Paper 102167, University Library of Munich, Germany, revised 30 Jul 2020.
    6. Flues, Florens & Löschel, Andreas & Lutz, Benjamin Johannes & Schenker, Oliver, 2013. "Ups and downs: How economic growth affects policy interactions," ZEW Discussion Papers 13-066, ZEW - Leibniz Centre for European Economic Research.
    7. Eric Jondeau & Grégory Levieuge & Jean-Guillaume Sahuc & Gauthier Vermandel, 2022. "Environmental Subsidies to Mitigate Transition risk," EconomiX Working Papers 2022-21, University of Paris Nanterre, EconomiX.
    8. Ren Wang & Yuxiang Bian & Han Gao & Jie Hou, 2023. "Optimal Environmental Policy for Heterogeneous Governments in China," IJERPH, MDPI, vol. 20(4), pages 1-12, February.
    9. Patrick Gruning, 2022. "Fiscal, Environmental, and Bank Regulation Policies in a Small Open Economy for the Green Transition," Working Papers 2022/06, Latvijas Banka.
    10. Chan, Ying Tung & Zhao, Hong, 2023. "Optimal carbon tax rates in a dynamic stochastic general equilibrium model with a supply chain," Economic Modelling, Elsevier, vol. 119(C).
    11. Coenen, Günter & Lozej, Matija & Priftis, Romanos, 2024. "Macroeconomic effects of carbon transition policies: An assessment based on the ECB’s New Area-Wide Model with a disaggregated energy sector," European Economic Review, Elsevier, vol. 167(C).
    12. Huang, Bihong & Punzi, Maria Teresa & Wu, Yu, 2022. "Environmental regulation and financial stability: Evidence from Chinese manufacturing firms," Journal of Banking & Finance, Elsevier, vol. 136(C).
    13. Barbara Annicchiarico & Fabio Di Dio, 2014. "Ramsey Monetary Policy and GHG Emission Control," CEIS Research Paper 330, Tor Vergata University, CEIS, revised 24 Sep 2014.
    14. Tang, Maogang & Li, Xiuzhen & Zhang, Yun & Wu, Yingtao & Wu, Baijun, 2020. "From command-and-control to market-based environmental policies: Optimal transition timing and China’s heterogeneous environmental effectiveness," Economic Modelling, Elsevier, vol. 90(C), pages 1-10.
    15. George Economides & Anastasio Xepapadeas, 2019. "The effects of climate change on a small open economy," CESifo Working Paper Series 7582, CESifo.
    16. Chan, Ying Tung, 2020. "Are macroeconomic policies better in curbing air pollution than environmental policies? A DSGE approach with carbon-dependent fiscal and monetary policies," Energy Policy, Elsevier, vol. 141(C).
    17. Shreekar Pradhan & J. Scott Holladay & Mohammed Mohsin & Shreekar Pradhan, 2015. "Environmental Policy Instruments and Uncertainties Under Free Trade and Capital Mobility," EcoMod2015 8102, EcoMod.
    18. Dissou, Yazid & Karnizova, Lilia, 2016. "Emissions cap or emissions tax? A multi-sector business cycle analysis," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 169-188.
    19. Batten, Sandra & Millard, Stephen, 2024. "Energy and climate policy in a DSGE model of the United Kingdom," Bank of England working papers 1064, Bank of England.
    20. Annicchiarico, Barbara & Di Dio, Fabio, 2015. "Environmental policy and macroeconomic dynamics in a new Keynesian model," Journal of Environmental Economics and Management, Elsevier, vol. 69(C), pages 1-21.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lsg:lsgwps:wp116. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The GRI Administration (email available below). General contact details of provider: https://edirc.repec.org/data/grlseuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.