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GDP and emissions in the short run: the rate and sources of economic growth matter

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

ACDE Seminar

Date & time

Tuesday 10 February 2015
2.00pm–3.30pm

Venue

Coombs Seminar Room B, Coombs Building 9, Fellows Road, ANU

Speaker

Dr Paul J Burke, Crawford School, ANU.

Contacts

Arianto Patunru
61259786

This paper investigates the short-run effects of economic growth on carbon dioxide emissions for 189 countries over the period 1961-2010. Contrary to what has previously been reported, we conclude that there is no strong evidence that the emissions-income elasticity is larger during individual years of economic expansion as compared to recession. Significant evidence of asymmetry emerges when effects over longer periods are considered. We find that economic growth tends to increase emissions growth not only in the same year, but also in subsequent years. Delayed effects – especially noticeable in the road transport sector – mean that emissions tend to grow more slowly after recessions. Emissions are more sensitive to fluctuations in industrial value-added than agricultural value-added, with services being an intermediate case. External shocks have a relatively large impact on domestic emissions, and the short-run emissions-income elasticity does not appear to decline as incomes increase. Economic growth and emissions are more tightly linked in fossil-fuel rich countries.

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