Convergence of per capita carbon dioxide emissions among developing countries: evidence from stochastic and club convergence tests

Abstract

This exploratory study extends the literature on the convergence of per capita carbon dioxide emissions in analyzing stochastic and club convergence within a panel framework for developing countries. The results from Pesaran (Journal of Applied Econometrics, 22(2), 265-312, 2007) and Bai and Carrion-i-Silvestre (Review of Economic Studies, 76(2), 471-501, 2009) panel unit root tests with allowance for cross-sectional dependence confirm stochastic convergence for low-income, lower middle-income, and combined country panels. Further analysis using the nonlinear time-varying factor model of Phillips and Sul (Econometrica, 75(6), 1771-1855, 2007; Journal of Applied Econometrics, 24(7), 1153-1185, 2009) to test for convergence reveals the emergence of multiple convergence clubs within each of the three country panels examined. We observe geographic proximity among many of the countries within the respective convergence clubs.

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Notes

  1. 1.

    See Zhou and Wang (2016) for a review of carbon dioxide emissions allocation approaches.

  2. 2.

    In addition, the convergence of per capita emissions is also a key assumption inherent in climate change models, and projecting future emissions (Apergis and Payne 2017).

  3. 3.

    While we focus our attention on per capita carbon dioxide emissions, a number of studies have investigated other types of emissions. In the case of sulfur dioxide and/or nitrogen oxide emissions, see List (1999), Lee and List (2004), Bulte et al. (2007), Ordas Criado et al. (2011), Payne et al. (2014), Hao et al. (2015a, b), Liu et al. (2018), and Solarin and Tiwari (2020); greenhouse gas emissions, see El-Montasser et al. (2015) and de Oliveira and Bourscheidt (2017); ecological footprint, see Biligili and Ulucak (2018), Ulucak and Apergis (2018), Solarin (2019), Ulucak et al. (2020), and Yilanci and Pata (2020); and for protected areas in the measurement of environmental quality, see Bimonte (2009).

  4. 4.

    In addition to country-wide studies, several studies have examined the convergence of per capita carbon dioxide emissions at the sub-national level, for the USA, see Aldy 2007; Burnett 2016; and Apergis and Payne 2017; and for China, see Huang and Meng 2013;Wang and Zhang 2014; Wu et al. 2016; and Yu et al. 2019.

  5. 5.

    Ezcurra (2007b), Li et al. (2014), and Tiwari and Mishra (2017) investigate the convergence of the level of carbon dioxide emissions. Camarero et al. (2008) and Camarero et al. (2013b) explore the convergence of environmental performance indicators and eco-efficiency indicators, respectively. Camarero et al. (2013a), Moutinho et al. (2014), Wang et al. (2014), Brannlund et al. (2015), Hao et al. (2015a, b), Zhao et al. (2015), Apergis et al. (2017), Kounetas (2018), Yu et al. (2018), Apergis and Payne (2020), and Apergis et al. (2020) examine the convergence of carbon dioxide emissions intensity.

  6. 6.

    As pointed out by Quah (1993) along with Evans (1996) and Evans and Karras (1996), cross-sectional β-convergence does not consider the possibility of multiple steady states.

  7. 7.

    The time period is selected in order to include as many countries as possible in the analysis.

  8. 8.

    Set r = 0.3.

  9. 9.

    α defined as \( \hat{b}/2. \)

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Appendix A

Appendix A

Low-income countries (27)
Afghanistan Malawi
Benin Mali
Burkina Faso Mozambique
Burundi Nepal
Central African Republic Niger
Chad Rwanda
Democratic Republic of Congo Sierra Leone
Ethiopia Somalia
Gambia Syrian Arab Republic
Guinea Tanzania
Guinea-Bissau Togo
Haiti Uganda
Liberia Yemen
Madagascar
Lower middle-income countries (38):
Angola Kiribati
Bangladesh Laos
Bhutan Mauritania
Bolivia Mongolia
Cabo Verde Morocco
Cambodia Myanmar
Cameroon Nicaragua
Comoros Nigeria
Republic of Congo Pakistan
Cote d’Ivoire Papua New Guinea
Djibouti Philippines
Egypt Sao Tome and Principe
El Salvador Senegal
Eswatini Solomon Islands
Ghana Tunisia
Honduras Vanuatu
India Vietnam
Indonesia Zambia
Kenya Zimbabwe

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Payne, J.E., Apergis, N. Convergence of per capita carbon dioxide emissions among developing countries: evidence from stochastic and club convergence tests. Environ Sci Pollut Res (2020). https://doi.org/10.1007/s11356-020-09506-5

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Keywords

  • Carbon dioxide emissions
  • Developing countries
  • Cross-sectional dependence
  • Stochastic convergence
  • club convergence

JEL codes

  • F64
  • Q40
  • Q50