Examining the Relationship between Carbon Emission and Economic Growth in G7 Countries
Chapter from the book:
Durgun,
B.
(ed.)
2023.
Macro Aspects of Environmental Economics.
Synopsis
The fact that global warming and climate disasters, which are among the leading global problems, increase the volume of carbon emissions and whether this has any relationship with economic growth are among the topics discussed in the literature. The aim of this study is to examine the long-term relationship between carbon emissions and economic growth for 7 developed countries (G7) between 1991 and 2021. The long-term relationship between the variables was determined by the Durbin-Housman panel cointegration test. In line with the cointegration test, the existence of a cointegrated relationship between the amount of carbon emissions per capita and GDP per capita variables was determined. Then, fully adjusted least squares (FMOLS) and dynamic least squares (DOLS) estimators were used for long-term coefficient estimation, and according to the findings, it was determined that the relationship between the variables was negative. This means that economic growth in G7 countries reduces carbon emissions. From these results, it is understood that economic growth in G7 countries will not prevent the determination of environmental policies. However, it is necessary to emphasize the importance of creating an economic model based on cleaner and renewable energy sources instead of traditional economic growth.