The Long-Run Decoupling of Emissions and Output: Evidence from the Largest Emitters

By Gail Cohen, João Tovar Jalles, Prakash Loungani, Ricardo Marto

March 13, 2018

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Gail Cohen, João Tovar Jalles, Prakash Loungani, and Ricardo Marto. The Long-Run Decoupling of Emissions and Output: Evidence from the Largest Emitters, (USA: International Monetary Fund, 2018) accessed September 20, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

For the world's 20 largest emitters, we use a simple trend/cycle decomposition to provide evidence of decoupling between greenhouse gas emissions and output in richer nations, particularly in European countries, but not yet in emerging markets. If consumption-based emissions—measures that account for countries' net emissions embodied in cross-border trade—are used, the evidence for decoupling in the richer economies gets weaker. Countries with underlying policy frameworks more supportive of renewable energy and climate change mitigation efforts tend to show greater decoupling between trend emissions and trend GDP, and for both production- and consumption-based emissions. The relationship between trend emissions and trend GDP has also become much weaker in the last two decades than in preceding decades.

Subject: Climate change, Climate policy, Emerging and frontier financial markets, Environment, Environmental policy, Financial markets, Greenhouse gas emissions

Keywords: Climate change, Climate policy, Coefficient estimate, Consumption pattern, Elasticity estimate, Emerging and frontier financial markets, Emissions, Environmental Kuznets Curve, Environmental Okun’s Law, Environmental policy, GHG emitter, Global, Greenhouse gas emissions, Trend elasticity, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/056
Stock No:

WPIEA2018056
ISBN:

9781484345283
ISSN:

1018-5941

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