Emissions and Growth: Trends and Cycles in a Globalized World

IMF Working Papers, August 30, 2017

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Emissions and Growth: Trends and Cycles in a Globalized World

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Bibliographic details

• Authors: Gail Cohen, João Tovar Jalles, Prakash Loungani, Ricardo Marto
• Published: August 30, 2017
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484316702.001

Key findings: cycles versus trends

• Recent discussions of the extent of decoupling between greenhouse gas (GHG) emissions and real gross domestic product (GDP) provide mixed evidence and have generated much debate.
• It is important to distinguish cycles from trends to get a clear picture of decoupling: there is an Environmental Okun's Law (a cyclical relationship between emissions and real GDP) that often obscures the trend relationship between emissions and real GDP.
• Once the cyclical relationship is accounted for, the trends show evidence of decoupling in richer nations—particularly in European countries, but not yet in emerging markets.

International trade and emissions accounting

• Distinguishing between production-based and consumption-based emissions changes the picture.
• Once net emission transfers via international trade are included, the evidence for decoupling among the richer countries gets weaker.

Role of policy frameworks

• Countries with underlying policy frameworks more supportive of renewable energy and supportive of climate change tend to have greater decoupling between trend emissions and trend GDP.
• This greater decoupling is observed for both production- and consumption-based emissions.

Subject coverage and keywords

• Subject: Business cycles, Economic growth, Environment, Exports, Greenhouse gas emissions, Imports, Income, International trade, National accounts
• Keywords (as provided): Africa, business cycle, Business cycles, East Asia, Eastern Europe, Emissions, emissions-output elasticity, Environmental Kuznets Curve, Environmental Okun’s Law, Exports, Global, Greenhouse gas emissions, Imports, Income, Kuznets coefficient, Kuznets elasticity, Okun coefficient, Okun elasticity, real GDP, time series, WP

Content in this bundle

• Emissions and Growth: Trends and Cycles in a Globalized World, WP/17/191, August 2017
  • Emissions and Growth: Trends and Cycles in a Globalized World, WP/17/191, August 2017 (Markdown version)
  • Emissions and Growth: Trends and Cycles in a Globalized World, WP/17/191, August 2017 (PDF)