Do CO2emission levels converge among 21 OECD countries? New evidence from unit root structural break tests

Abstract

This study empirically re-investigated whether carbon dioxide (CO2) emissions series were stationary in 21 OECD countries during the 1960–2000 period. A suite of test statistics were employed, proposed by Sen (2003 Sen, A. 2003. On unit-root tests when the alternative is a trend-break stationary process. Journal of Business and Economics Statistics, 21: 174–84. [Taylor & Francis Online], [Web of Science ®] , [Google Scholar]), with a model that simultaneously allows for a break within the context of Perron's (1989 Perron, P. 1989. The great crash, the oil price shock and the unit root hypothesis. Econometrica, 57: 1361–401. [Crossref], [Web of Science ®] , [Google Scholar]) mixed intercept and slope (Model C). The distinction between this study and previous ones lies in its control for breaks. Compared with the results from traditional unit root tests, the empirical findings provide further evidence that relative per capita CO2 emissions were stationary and were stochastically converging. In addition, structural breaks are identified in each country, and some important policy implications emerge from the results.

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