Convergence of CO₂ emissions and economic growth in the OECD countries: Did the type of fuel matter?

ABSTRACT

This study analyzes convergence in CO₂ emissions in the Organization for Economic Cooperation and Development (OECD) countries with respect to the source of emissions (oil vs. coal). The investigated period 1973–2010 is divided into two subperiods, 1973–1991 and 1992–2010. The first period covers the Organization of the Petroleum Exporting Countries (OPEC) oil price shocks, where the OECD oil policy was to a high extent governed by energy security concerns and Cold War strategic considerations. The second period corresponds to the end of the Cold War and the rise of climate policy in several OECD countries. Due to such contextual differences, oil and coal behave differently in the two subperiods. The generally stronger convergence with respect to oil-related emissions until 1991 conditional on gross domestic product per capita is compatible with a situation where the rising oil prices led to a strong transformation in the countries of interest. Besides, we evidence decoupling of economic growth from oil-related emissions in the post-Cold War period.

KEYWORDS:

• Carbon convergence
• coal
• OECD
• oil
• OPEC crises

Funding

Financial support for this research has been provided by the Swedish Energy Agency with Dnr. 2011-004694.

Notes

¹ See Pettersson et al. (2014) for a more detailed theoretical background of carbon convergence.

² Australia, Austria, Belgium, Canada, Chile, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, Republic of Korea, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, the UK, and the US. We exclude the remaining OECD members due to data constraints.

Additional information

Funding

Financial support for this research has been provided by the Swedish Energy Agency with Dnr. 2011-004694.