Re-Examining the Empirical Evidence for Stochastic Convergence of Two Air Pollutants with a Pair-Wise Approach

• Published in: Environmental & resource economics 2009-12, Vol.44 (4), p.555-570
• Main Author: Nourry, Myriam
• Format: Article
• Language: English
• Subjects: Air pollution; C32; C33; Carbon dioxide; Carbon emissions; Convergence; Datasets; Econometrics; Economic models; Economic Policy; Economic statistics; Economic theory; Economics; Economics and Finance; Emission analysis; Emissions; Empirical analysis; Environment; Environmental Economics; Environmental Law/Policy/Ecojustice; Environmental Management; Hypotheses; Joint confirmation Hypothesis; Methods; Per capita; Pollutants; Pollution; Q53; Q54; Stochastic convergence; Stochastic processes; Stochasticity; Studies; Sulfur; Sulfur dioxide; Time series; Unit root; Unit roots
• ISSN: 0924-6460; 1573-1502
• DOI: 10.1007/s10640-009-9301-9

This paper examines the hypothesis of stochastic convergence for two air pollutants emissions (carbon dioxide [CO₂] and sulfur dioxide [SO₂]). The value-added of this paper lies in the use of a recent, alternative econometric method, a pair-wise approach that considers all the possible pairs of log per-capita pollutant emission gaps across all the countries in the sample. In this method, all emissions differences must be stationary around a constant mean. Empirical results support different conclusions on stochastic convergence in per capita CO₂ and SO₂ emissions depending on the choice of the unit root test. The use of specific critical values from the ADF-KPSS joint test overcomes these initial conflicting results and leads to small percentages of stationary pairs around a constant mean; which invalidate the hypothesis of stochastic convergence for per capita emissions of CO₂ and SO₂, even over the OECD sub-dataset.