Global long-run convergence of carbon emissions and intensity vis-à-vis countries' industrial profiles

Yigang Wei; Tsun Se Cheong; Michal Wojewodzki; Xunpeng Shi; Yigang Wei; Tsun Se Cheong; Michal Wojewodzki; Xunpeng Shi

doi:10.3934/GF.2024023

Green Finance

2024, Volume 6, Issue 4: 612-629. doi: 10.3934/GF.2024023

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Research article

Global long-run convergence of carbon emissions and intensity vis-à-vis countries' industrial profiles

1.
School of Economics and Management, Beihang University, China
2.
School of Business, The Hang Seng University of Hong Kong, Hong Kong
3.
Faculty of Business, Lingnan University, Hong Kong
4.
Australia-China Relations Institute, University of Technology Sydney, Australia

Received: 29 May 2024 Revised: 01 August 2024 Accepted: 18 September 2024 Published: 15 October 2024
JEL Codes: C14, O14, Q54

We examined distribution dynamics and the long-run evolution of cross-country relative per capita carbon emissions (REPC) and intensity (RCI) vis-à-vis countries' two factors: industrial and services sectors' output. Unlike other researchers, we employed two visual tools of the distribution dynamics approach and used a panel of 217 countries. We ranked the countries based on the two factors and grouped them into four quartiles (Q1 to Q4) for each factor, resulting in eight subsamples. The results suggested long-run absolute convergence in REPC (RCI) only among highly industrialized (Q3 and Q4) countries. However, two to four convergence clubs emerged within the remaining subsamples. Besides a few (many) of the least (the most) industrialized countries converging towards the global average RCI, clubs occur at levels significantly below or above the worldwide average. The convergence was more (less) significant and towards higher (lower) REPC and RCI values for economies with low (high) industrialization. We constructed a policy priority list consisting of the least services-oriented (Q1) countries with REPC (RCI) values of 3 (7.4) and 20 (30) percent probability of further divergence from the global average in the coming years. From the perspective of climate policies aiming at reducing and converging carbon emissions, these countries require the urgent development and implementation of coordinated, bespoke policies and ongoing monitoring.
- carbon emissions,
- carbon intensity,
- industrial structure,
- distribution dynamics,
- convergence club
Citation: Yigang Wei, Tsun Se Cheong, Michal Wojewodzki, Xunpeng Shi. Global long-run convergence of carbon emissions and intensity vis-à-vis countries' industrial profiles[J]. Green Finance, 2024, 6(4): 612-629. doi: 10.3934/GF.2024023

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Abstract

We examined distribution dynamics and the long-run evolution of cross-country relative per capita carbon emissions (REPC) and intensity (RCI) vis-à-vis countries' two factors: industrial and services sectors' output. Unlike other researchers, we employed two visual tools of the distribution dynamics approach and used a panel of 217 countries. We ranked the countries based on the two factors and grouped them into four quartiles (Q1 to Q4) for each factor, resulting in eight subsamples. The results suggested long-run absolute convergence in REPC (RCI) only among highly industrialized (Q3 and Q4) countries. However, two to four convergence clubs emerged within the remaining subsamples. Besides a few (many) of the least (the most) industrialized countries converging towards the global average RCI, clubs occur at levels significantly below or above the worldwide average. The convergence was more (less) significant and towards higher (lower) REPC and RCI values for economies with low (high) industrialization. We constructed a policy priority list consisting of the least services-oriented (Q1) countries with REPC (RCI) values of 3 (7.4) and 20 (30) percent probability of further divergence from the global average in the coming years. From the perspective of climate policies aiming at reducing and converging carbon emissions, these countries require the urgent development and implementation of coordinated, bespoke policies and ongoing monitoring.

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