The Convergence in Greenhouse Gas Emissions Across G-7 Countries

Year 2023, Volume: 7 Issue: 1, 327 - 340, 25.01.2023

Neslihan Ursavaş , Şükrü Apaydın

https://doi.org/10.25295/fsecon.1143345

Abstract

Environmental degradation, such as climate crisis, global warming, etc., is one of the crucial issues for countries. Studies in the literature analyze the convergence in environmental degradation regarding the environmental convergence hypothesis using different indicators such as carbon dioxide emissions, ecological footprint, etc. to identify the differences in environmental quality across countries. This study tests the environmental convergence hypothesis for G-7 countries over the period 1997-2018. To do so, we use greenhouse gas emissions per capita as an indicator of environmental degradation and apply non-linear dynamic factor model developed by Phillips and Sul (2007). According to the results, countries do not converge to a single equilibrium point. However, Phillips and Sul (2007) convergence methodology allows us to identify possible convergence clubs. The club clustering algorithm identifies three convergence clubs, each converging to a different steady-state. Club 1, which converges to higher greenhouse gas emissions per capita level, includes Canada and United States, whereas Club 2 includes Germany and Japan, and Club 3 includes France, Italy, and the United Kingdom. The results confirm that the that the environmental convergence hypothesis does not hold for G-7 countries.

Keywords

Convergence Hypothesis,, Environmental Convergence Hypothesis, Greenhouse Gas Emissions, Log-t Test, G-7 Countries

G-7 Ülkelerinde Sera Gazı Emisyonu Yakınsaması

Abstract

İklim krizi, küresel ısınma gibi çevresel bozulmalar ülkeler için en önemli konulardan biridir. Literatürdeki çalışmalar, ülkeler arasındaki çevresel kalite farklılıklarını ortaya koymak için karbondioksit emisyonları, ekolojik ayak izi gibi farklı göstergeler kullanarak çevresel yakınsama hipotezi çerçevesinde çevresel bozulmadaki yakınsamayı incelemektedir. Bu çalışma, 1997-2018 döneminde G-7 ülkeleri için çevresel yakınsama hipotezini test etmektedir. Bunu yapmak için, çevresel bozulmanın bir göstergesi olarak kişi başına düşen sera gazı emisyonları kullanılmakta ve Phillips ve Sul (2007) tarafından geliştirilen doğrusal olmayan dinamik faktör modelini uygulanmaktadır. Ede edilen bulgulara göre ülkeler tek bir denge noktasına yakınsamamaktadır. Bununla birlikte, Phillips ve Sul (2007) yakınsama metodolojisi, olası yakınsama kulüplerinin belirlenmesini sağlamaktadır. Kulüp kümeleme algoritması, her biri farklı bir sabit duruma yakınsayan üç yakınsama kulübü tanımlamaktadır. Kişi başına daha yüksek sera gazı emisyonları seviyesine yakınsayan Club 1, Kanada ve Amerika Birleşik Devletleri'ni içerirken, Kulüp 2 Almanya ve Japonya’yı ve Kulüp 3 Fransa, İtalya ve Birleşik Krallık’ı içermektedir. Elde edilen sonuçlar çevresel yakınsama hipotezinin G-7 ülkeleri için geçerli olmadığını doğrulamaktadır.

Keywords

Yakınsama Hipotezi, Çevresel Yakınsama Hipotezi, Sera Gazı Emisyonu, Log-t Test, G-7 Ülkeleri

References

• Acar, S., Söderholm, P. and Brännlund, R. (2018). Convergence of per Capita Carbon Dioxide Emissions: İmplications And Meta-Analysis. Climate policy, 18(4), 512-525.
• Acaravci, A. and Erdogan, S. (2016). The Convergence Behavior of CO2 Emissions in Seven Regions under Multiple Structural Breaks, International Journal of Energy Economics and Policy, 6(3), 575-580.
• Ahmed, M., Khan, A. M., Bibi, S., and Zakaria, M. (2017). Convergence of Per Capita CO2 Emissions across The Globe: Insights via Wavelet Analysis, Renewable and Sustainable Energy Reviews, 75, 86-97. https://doi.org/10.1016/j.rser.2016.10.053
• Aldy, J. E. (2006). Per Capita Carbon Dioxide Emissions: Convergence or Divergence?, Environmental and Resource Economics, 33(4), 533-555. doi: 10.1007/s10640-005-6160-x
• Apergis, N. and Garzón, A. J. (2020). Greenhouse Gas Emissions Convergence in Spain: Evidence from The Club Clustering Approach, Environmental Science and Pollution Research, 27(31), 38602-38606. https://doi.org/10.1007/s11356-020-08214-4
• Bilgili, F. and Ulucak, R. (2018). Is There Deterministic, Stochastic, and/or Club Convergence in Ecological Footprint İndicator among G20 Countries?, Environmental Science and Pollution Research, 25(35), 35404-35419. https://doi.org/10.1007/s11356-018-3457-1
• Brännlund, R., Karimu, A., and Söderholm, P. (2014). Convergence in Carbon Dioxide Emissions and The Role of Growth and Institutions Parametric and Nonparametric Analysis, Available at SSRN 2573611.
• Brock, W. A. and Taylor, M. S. (2003). The Kindergarten Rule of Sustainable Growth, NBER Working Paper, No: 9597. doi:10.3386/w9597
• Churchill, S. A., Inekwe, J. and Ivanovski, K. (2018). Conditional Convergence in Per Capita Carbon Emissions Since 1900, Applied Energy, 228, 916-927. https://doi.org/10.1016/j.apenergy.2018.06.132
• De Oliveira, G. and Bourscheidt, D. M. (2017). Multi-sectorial Convergence in Greenhouse Gas Emissions, Journal of Environmental Management, 196, 402-410. https://doi.org/10.1016/j.jenvman.2017.03.034
• El-Montasser, G., Inglesi-Lotz, R., & Gupta, R. (2015). Convergence of Greenhouse Gas Emissions among G7 Countries. Applied Economics, 47(60), 6543-6552. https://doi.org/10.1080/00036846.2015.1080809
• Emir, F., Balcilar, M. and Shahbaz, M. (2019). Inequality in Carbon Intensity in EU-28: Analysis Based on Club Convergence. Environmental Science and Pollution Research, 26(4), 3308-3319. https://doi.org/10.1007/s11356-018-3858-1
• Erdogan, S. and Okumus, I. (2021). Stochastic and Club Convergence of Ecological Footprint: An Empirical Analysis for Different Income Group of Countries. Ecological Indicators, 121, 107123. https://doi.org/10.1016/j.ecolind.2020.107123
• Ezcurra, R. (2007). Is There Cross-Country Convergence in Carbon Dioxide Emissions?. Energy Policy, 35(2), 1363-1372. https://doi.org/10.1016/j.enpol.2006.04.006
• Galor, O. (1996). Convergence? Inferences from Theoretical Models. The Economic Journal, 106(437), 1056-1069. https://doi.org/10.2307/2235378
• Huenteler, J., Schmidt, T. S., and Kanie, N. (2012). Japan's Post-Fukushima Challenge–Implications from The German Experience on Renewable Energy Policy. Energy Policy, 45, 6-11.
• Islam, N. (2003). What Have We Learnt from The Convergence Debate?. Journal of Economic Surveys, 17(3), 309-362. https://doi.org/10.1111/1467-6419.00197
• Ivanovski, K. and Churchill, S. A. (2020). Convergence and Determinants of Greenhouse Gas Emissions in Australia: A regional analysis. Energy Economics, 92, 104971. https://doi.org/10.1016/j.eneco.2020.104971
• Jan, S. A. and Chaudhary, A. R. (2011). Testing The Unconditional Convergence Hypothesis for Pakistan. World Applied Sciences Journal, 13(2), 200-205.
• Lawson, L. A., Martino, R., & Nguyen-Van, P. (2020). Environmental convergence and environmental Kuznets curve: A unified empirical framework. Ecological Modelling, 437, 109289.
• Panopoulou, E. and Pantelidis, T. (2009). Club Convergence in Carbon Dioxide Emissions. Environmental and Resource Economics, 44(1), 47-70. doi:10.1007/s10640-008-9260-6
• Phillips, P. C. and Sul, D. (2007). Transition Modelling and Econometric Convergence Tests. Econometrica, 75(6): 1771-1855. https://doi.org/10.1111/j.1468-0262.2007.00811.x
• Phillips, P. C. B. and Sul, D. (2009). Economic Transition and Growth. Journal of Applied Econometrics, 24(7), 1153-1185. https://doi.org/10.1002/jae.1080
• Robalino-López, A., García-Ramos, J. E., Golpe, A. A. and Mena-Nieto, A. (2016). CO2 Emissions Convergence among 10 South American Countries. A study of Kaya components (1980–2010). Carbon Management, 7(1-2), 1-12. https://doi.org/10.1080/17583004.2016.1151502
• Rodrik, D. (2011). The Future of Economic Convergence. National Bureau of Economic Research, No: w17400. Doi: 10.3386/w17400
• Romero-Ávila, D. (2008). Convergence in Carbon Dioxide Emissions among Industrialised Countries Revisited. Energy Economics, 30(5), 2265-2282. https://doi.org/10.1016/j.eneco.2007.06.003
• Runar, B., Amin, K. and Patrik, S. (2017). Convergence in Carbon Dioxide Emissions and The Role of Growth and Institutions: A Parametric and Non-Parametric Analysis. Environmental Economics and Policy Studies, 19(2), 359-390. doi: 10.1007/s10018-016-0162-5
• Solarin, S. A. and Tiwari, A. (2020). Convergence in Sulphur Dioxide (SO2) Emissions since 1850 in OECD Countries: Evidence from A New Panel Unit Root Test. Environmental Modeling & Assessment, 25(5), 665-675. https://doi.org/10.1007/s10666-019-09687-5
• Solarin, S. A., Yilanci, V. and Gorus, M. S. (2021). Convergence of Aggregate and Sectoral Nitrogen Oxides in G7 Countries for 1750–2019: Evidence From A New Panel Fourier Threshold Unit Root Test. Journal of Cleaner Production, 324, 129298
• Solow, R. M. A. (1956). Contribution to The Theory of Economic Growth. The Quarterly Journal of Economics, 70(1): 65–94. https://doi.org/10.2307/1884513
• Tillaguango, B., Alvarado, R., Dagar, V., Murshed, M., Pinzón, Y. and Méndez, P. (2021). Convergence of The Ecological Footprint in Latin America: The Role of The Productive Structure. Environmental Science and Pollution Research, 1-13. https://doi.org/10.1007/s11356-021-14745-1
• Tiwari, C. and Mishra, M. (2017). Testing The CO2 Emissions Convergence: Evidence from Asian Countries. IIM Kozhikode Society & Management Review, 6(1), 67-72. https://doi.org/10.1177/2277975216674073
• Ulucak, R., Kassouri, Y., Ilkay, S. Ç., Altıntaş, H. and Garang, A. P. M. (2020). Does Convergence Contribute to Reshaping Sustainable Development Policies? Insights from Sub-Saharan Africa. Ecological Indicators, 112, 106140. https://doi.org/10.1016/j.ecolind.2020.106140
• United Nations Statistics Division, 2021. Basic data selection. Available at Accessed on. https://unstats.un.org/unsd/snaama/Basic.
• Van, P. N. (2005). Distribution Dynamics of CO2 Emissions. Environmental and Resource Economics, 32(4), 495-508.
• Yilanci, V., Gorus, M. S. and Solarin, S. A. (2022). Convergence in per capita carbon footprint and ecological footprint for G7 countries: Evidence from panel Fourier threshold unit root test. Energy & Environment, 33(3), 527-545.
• Wachernagel, M. and Rees, W. (1998). Our Ecological Footprint: Reducing Human Impact on The Earth. Canada: New Society Publishers.
• Wang, J. and Zhang, K. (2014). Convergence of Carbon Dioxide Emissions in Different Sectors in China. Energy, 65, 605-611. https://doi.org/10.1016/j.energy.2013.11.015
• Westerlund, J. and Basher, S. A. (2008). Testing for Convergence in Carbon Dioxide Emissions Using A Century of Panel Data. Environmental and Resource, 40(1). 109-120. doi: 10.1007/s10640-007-9143-2
• Wu, H., Huang, H., Tang, J., Chen, W. and He, Y. (2019). Net Greenhouse Gas Emissions from Agriculture in China: Estimation, spatial correlation and convergence. Sustainability, 11(18), 4817. https://doi.org/10.3390/su11184817
• Yavuz, N. C. and Yilanci, V. (2013). Convergence in Per Capita Carbon Dioxide Emissions Among G7 Countries: A TAR Panel Unit Root Approach. Environmental and Resource Economics, 54(2), 283-291.
• Yilanci, V., Ursavaş, U. and Ursavaş, N. (2022). Convergence in Ecological Footprint Across The Member States Of ECOWAS: Evidence From A Novel Panel Unit Root Test. Environmental Science and Pollution Research, 1-12.
• Young, A. T., Higgins, M. J. and Levy, D. (2008). Sigma Convergence Versus Beta Convergence: Evidence from US County‐Level Data. Journal of Money, Credit and Banking, 40(5), 1083-1093. https://doi.org/10.1111/j.1538-4616.2008.00148.x