Impact of International Environmental Agreements on Procyclicality of Carbon Dioxide Emissions and Business Cycles

Abstract

The relationship between cyclic components of carbon dioxide (CO2) emissions and gross domestic product (GDP) growth is procyclical for a typical economy. Potential effects of a policy decision on the environment require policymakers to consider the impact of GDP growth on CO2 emissions for a country. This paper investigates the changing dynamics of procyclicality of CO2 emissions with respect to GDP growth following the Kyoto protocol which represents a strong commitment for a green economy by the industrialized countries. We compare two time periods (1970-2005 and 2006-2017) before and after the Kyoto Protocol by calculating the Pearson correlation coefficients and using linear regression models for 48 countries which produced 79% of the world total CO2 emissions in 2017. Our study finds that the procyclicality of the CO2 emissions and GDP growth decreased in 29 countries and increased in 19 countries in the period 2006-2017 following the Kyoto Protocol. We extract the cyclical components by Hodrick-Prescot filter. We also build VAR models and compute impulse response functions, which agree with the statistical findings.

Keywords

• Kyoto
• CO2
• Business Cycles
• PROCYCLICALITY
• PROCYCLICALITY
• Green economy
• Climate Change

Uluslararası Çevresel Anlaşmaların İş Çevrimleri ve Karbondioksit Emilinin Döngüsel Bileşenleri Üzerindeki Etkisi

Öz

Tipik bir ekonomideki Karbondioksit emisyonunun (CO2) ve Gayri safi yurtiçi hasıladaki (GSYIH) büyümenin döngüsel bileşenleri aynı yöndedir. Politika karar alıcıları, bir ekonomi politikası kararının çevre üzerindeki olası etkilerini hesaplarken, ülkedeki GSYIH’daki büyümenin CO2 emisyonu üzerindeki etkilerini dikkate alması gerekir. Bu makale, sanayileşmiş ülkeler tarafından yeşil bir ekonomi için güçlü bir taahhüdü temsil eden Kyoto protokolünü takiben GSYİH büyümesine göre CO2 emisyonlarının döngüselliğinin değişen dinamiklerini incelemektedir. Bu çalışmada 2017 yılında dünya toplam CO2 emisyonlarının %79'unu üreten 48 ülke için Pearson korelasyon katsayılarını hesaplayarak ve lineer regresyon modellerini kullanarak Kyoto Protokolü öncesi ve sonrası iki zaman dönemini (1970-2005 ve 2006-2017) karşılaştırılmaktadır. Çalışmamızda, Kyoto Protokolü sonrası 2006-2017 döneminde CO2 emisyonlarının ve GSYİH büyümesinin döngüselliğinin 29 ülkede azaldığını ve 19 ülkede arttığını ortaya koymaktadır. Döngüsel bileşenlerin ortaya çıkarılması için Hodrick-Prescot filtresi kullanılmıştır. Ayrıca, bu sonuçları elde edebilmek için istatistiksel bulgularla uyumlu olan VAR modelleri oluşturulmuş ve tepki fonksiyonları hesaplanmıştır.

Anahtar Kelimeler

• Kyoto Protokolü
• Yeşil ekonomi
• Konjonktür dalgalanmaları
• CO2 emisyonu
• İklim değişikliği

Kaynakça

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