32/2008
December
Carbon Kuznets curves in the climate change political economy arena. New evidence comparing various panel estimators
 
Massimiliano Mazzanti, Antonio Musolesi


The paper analyses the extent of structural differences among climate change leading 'actors' - Northern EU members, southern EU countries and the so called 'Umbrella group' - with regard to intrinsic income-environment relationships and their climate change policy perspectives. Homogeneous estimators and heterogeneous estimators allowing individual slopes are employed by emphasising both cross-section correlation and adjustment dynamics. We find that the group of countries that is less in favour of stringent climate policy have yet to experience a Kuznets curve, though they show relative delinking in the carbon-income relationship. Northern EU countries tend to show bell shapes. Heterogeneous based panel models seem to perform relatively better at capturing the dynamic link between income and environment. Results are relevant from both an economic and a methodological point of view, and provide food for thought in terms of post Kyoto negotiations.

 
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