Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2014:15: Convergence in global environmental performance Assessing country heterogeneity

Runar Brännlund () and Amin Karimu ()
Additional contact information
Runar Brännlund: CERE, Postal: Department of Economics, Umeå University, S-901 87, Umeå, Sweden
Amin Karimu: CERE, Postal: Department of Economics, Umeå University, S-901 87, Umeå, Sweden

Abstract: A large body of literature explores convergence in environmental performance (EP) using a simple measure of the percentage change of per capita CO2 as dependent variable and the level of per capita CO2 and GDP as explanatory variables. As such it conforms to the standard convergence literature in the economic growth literature. This study differs from these studies by constructing a measure based on production theory, where production processes explicitly results in the production of two outputs; a good output (GDP) and a bad output (CO2). Based on this we derive an EP index that can be expressed as the ratio of the inverse of the change of the emission intensity. We use the derived EP index to test the beta-convergence hypothesis for a panel of 94 countries. The results reveal strong evidence in support of beta-convergence in environmental, or carbon, performance. Moreover we find evidence of heterogeneity between groups of countries in line with the concept of “club” convergence and also heterogeneity between countries within country groups, especially for the high-income group. Additionally, we find evidence of a negative relation between environmental performance and fossil fuel share both at the global level as well as within sub-samples, which tend to vary with capital intensity. As such the results conform to the results from studies of the dynamics of per capita emissions. These results are therefore very informative and can help in both regional and international negotiations regarding burden sharing of global CO2 emissions. The results also suggest a balanced policy mix between efficiency and conservation policies in order to promote good environmental performance.

Keywords: Convergence; Environmental Performance; Fossil fuel; Kyoto Protocol; Spillovers

JEL-codes: Q20; Q28; Q38

28 pages, February 18, 2015

Full text files

636-convergence-in-global-environmental-performance-assessing-country-heterogeneity.html HTML file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Mona Bonta Bergman ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:37:55.