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Are carbon dioxide emission reductions compatible with sustainable well-being?

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  • Sugiawan, Yogi
  • Kurniawan, Robi
  • Managi, Shunsuke

Abstract

Efforts to reduce carbon dioxide (CO2) emissions remain elusive due to the strong correlation with economic development. The progress of economic development therefore needs to be assessed by considering the harmful effects of CO2 emissions as a loss of intergenerational well-being. This has been the motivation behind the development of the inclusive wealth (IW) index, which is proposed as a viable alternative to the conventional gross domestic product for tracking the progress towards the well-being of a nation. By using nonparametric machine learning methods, this study aims to explore the impact of CO2 emission reduction on well-being under the IW framework via three different energy pathways, namely, the supply, mix and efficiency pathways, involving 105 countries from 1992 to 2014. Results showed that the lowest growth in global CO2 emissions was projected by the efficiency scenario, which forecasted an increase by 2040 of 15.12% relative to the 2014 level. However, this scenario might lead to a potential loss in future well-being by up to 0.3%, compared to the two other scenarios. These findings suggest that the commitment to CO2 emission reduction needs to be evaluated cautiously by considering its impact on intergenerational well-being, particularly for developing economies. In contrast, high-income economies were encouraged to set up a more ambitious target of CO2 emission reduction since doing so would also lead to a potential increase of their intergenerational well-being. This study verifies a robust link between sustainable development and CO2 emission mitigation scenarios, which is essential for promoting future climate actions.

Suggested Citation

  • Sugiawan, Yogi & Kurniawan, Robi & Managi, Shunsuke, 2019. "Are carbon dioxide emission reductions compatible with sustainable well-being?," Applied Energy, Elsevier, vol. 242(C), pages 1-11.
    • Handle: RePEc:eee:appene:v:242:y:2019:i:c:p:1-11
    DOI: 10.1016/j.apenergy.2019.03.113
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