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Robust Determinants of CO2 Emissions

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  • Carlos Aller

    (Department of Economic Theory and Economic History, University of Granada.)

  • Lorenzo Ductor

    (Department of Economic Theory and Economic History, University of Granada.)

  • Daryna Grechyna

    (Department of Economic Theory and Economic History, University of Granada.)

Abstract

We synthesize the findings of a large number of recent papers on the determinants of CO2 emissions and identify the most robust determinants accounting for model uncertainty using two different approaches; Bayesian Model Averaging and Cluster-LASSO. Our results show that GDP per capita, the share of fossil fuels in energy consumption, urbanization, industrialization, democratization, the indirect effects of trade (networks effects) and political polarization are the robust determinants of CO2 emissions per capita. All of these determinants negatively affect the environment, with the exception of greater political polarization, which reduces the level of CO2 emissions. We also find that the determinants of CO2 emissions depend on the level of income per capita of a country. In low-income economies, foreign direct investment increases environmental degradation, while tourist arrivals have a negative impact on the environment in high-income economies.

Suggested Citation

  • Carlos Aller & Lorenzo Ductor & Daryna Grechyna, 2020. "Robust Determinants of CO2 Emissions," ThE Papers 20/13, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:20/13
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    Keywords

    Keywords: carbon dioxide emissions; model uncertainty; Bayesian Model Averaging; LASSO estimator;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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