Transport Infrastructure and CO 2 Emissions in the OECD Over the Long Run

Abstract

We examine the effect of transport infrastructure on carbon dioxide (CO2) emissions in OECD countries over a period of almost 150 years. To do so, we employ both parametric and non-parametric panel data techniques. With the parametric estimates, we find mixed evidence of a statistically significant positive relationship between transport infrastructure and CO2 emissions, which is dependent on the specific long-run estimator used. Our non-parametric estimates suggest that the common trend function for CO2 emissions is rising for most of the period and that there is a time-varying relationship between transport infrastructure and CO2 emissions. The computed time-varying coefficient function of transport infrastructure has been positive since 1940, and the observed effect is most pronounced between 1940 and 1960.