Convergence of CO2 emissions in OECD countries

Abstract

This paper examines the convergence of carbon dioxide (CO₂) emissions in OECD countries. Specifically, we are interested in examining to what extent the per capita emissions of different countries tend to draw closer over time. This issue is important since this question is associated with fairness regarding the distribution of per capita emissions. In this context, we examine the stochastic convergence of per capita carbon dioxide emissions for 30 OECD countries from 1960 to 2018. We adopt a newly developed test by Payne et al. (2022), which allows for two structural breaks and cross-correlations in a factor structure. Our results accounting for breaks and factors jointly show that per capita CO₂ emissions do not converge, implying that the differences in CO₂ emissions exist and are persistent.