Grazing the Commons: Global Carbon Emissions Forever?

This paper presents the results from our investigation of the per-capita, long- term relation between carbon dioxide emissions and gross domestic product (GDP) for the world, obtained with the use of a new, exible estimator. Consistent with simple economic growth models, we find that regional, population-weighted per- capita emissions systematically increase with income (scale effect) and usually de- cline over time (composition and technology effect). Both our in-sample results and out-of-sample scenarios indicate that this negative time effect is unlikely to compen- sate for the upward-income effect at a global level, in the near future. In particular, even if China's specialization in carbon-intensive industrial sectors would come to a halt, recent trends outside China make a reversal of the overall global trend very unlikely.