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A note on CO2 emissions using two new tests

Author

Listed:
  • Peter Sephton

    (Queen’s University)

  • Tolga Omay

    (Atılım University)

Abstract

Recent research suggests that policies implementing structural change are required to alter the paths of carbon dioxide emissions in many nations. This note provides additional support for this view, allowing for smooth shifts in the deterministic part of the stochastic process. A Fourier wavelet unit root test indicates that in many countries, a temporary shock to emissions will have a permanent impact, whereas tests that examine fractional integration around a smooth break with de-trending indicate that a shock to emissions will have a transitory impact. Policies that induce structural changes are required to place emissions on a downward path.

Suggested Citation

  • Peter Sephton & Tolga Omay, 2023. "A note on CO2 emissions using two new tests," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(4), pages 933-941, November.
    • Handle: RePEc:kap:empiri:v:50:y:2023:i:4:d:10.1007_s10663-023-09584-x
    DOI: 10.1007/s10663-023-09584-x
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    References listed on IDEAS

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    1. Marco R. Barassi & Nicola Spagnolo & Yuqian Zhao, 2018. "Fractional Integration Versus Structural Change: Testing the Convergence of $$\hbox {CO}_{2}$$ CO 2 Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(4), pages 923-968, December.
    2. Octavio Fernández-Amador & Doris A. Oberdabernig & Patrick Tomberger, 2022. "Do methane emissions converge? Evidence from global panel data on production- and consumption-based emissions," Empirical Economics, Springer, vol. 63(2), pages 877-900, August.
    3. Schwert, G William, 2002. "Tests for Unit Roots: A Monte Carlo Investigation," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 5-17, January.
    4. Palm, Franz C. & Smeekes, Stephan & Urbain, Jean-Pierre, 2011. "Cross-sectional dependence robust block bootstrap panel unit root tests," Journal of Econometrics, Elsevier, vol. 163(1), pages 85-104, July.
    5. Juan J. Dolado & Jesus Gonzalo & Laura Mayoral, 2002. "A Fractional Dickey-Fuller Test for Unit Roots," Econometrica, Econometric Society, vol. 70(5), pages 1963-2006, September.
    6. Peter S. Sephton, 2020. "Mean Reversion in CO2 Emissions: the Need for Structural Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 953-975, April.
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