Forecasting The Path of U.S. CO₂ Emissions Using State-Level Information

Abstract

We compare the most common reduced-form models used for emissions forecasting, point out shortcomings, and suggest improvements. Using a U.S. state-level panel data set of CO 2 emissions, we test the performance of existing models against a large universe of potential reduced-form models. We find that leading models in the literature, as well as models selected based on an emissions per capita loss measure or different insample selection criteria, perform significantly worse compared to the best model chosen based directly on the out-of-sample loss measure defined over aggregate emissions. The Review of Economics and Statistics, February 2012, 94(1): 172-185 © 2011 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology FORECASTING THE PATH OF U.S. CO 2 EMISSIONS 173 4The EIA uses the NEMS model to forecast the national energy system and CO 2 emissions, which are published in the "Annual Energy Outlook." Since these forecasts are provided by an agency of the U.S. government, they are considered the official forecasts. The EIA conducts an annual outof-sample evaluation of its forecasts, but it is not used to reparameterize the NEMS model. For a discussion of the NEMS model forecast evaluation, see O'Neill and Desai (2005) or Auffhammer (2007).

Forecasting residential electricity demand in provincial China

“…6 Residential electricity consumption and income per capita for selected provinces in quadratic, or cubic (Liao and Cao 2013). Auffhammer and Carson (2008), Auffhammer and Steinhauser (2012), Liao and Cao (2013), and Schmalensee et al (1998) used it to examine the non-linear relationship between CO 2 emission and economic development. In a reduced form, the model can be presented as follows:…”

“…Fourth, it is easy to obtain authoritative or official projections of income, but it is difficult to obtain projections for regressors like urbanization rate and heating degree days. Besides, it is also the spirit of a reduced-form model with lower data requirements to use limited variables (Auffhammer and Steinhauser 2012).…”

Can China Achieve its CO2 Emission Mitigation Target in 2030: a System Dynamics Perspective

“…The common approaches and models employed in the literatures are partly summarized as follows: EKC analysis [9][10][11][12]; statistics model such as cointegration [13][14], Granger causality [15][16] generalized method of moments (GMM) estimators [17]; input-output model [1,[18][19][20][21][22]; reduced-form econometrics model [3,23]; decomposition analyses, including structural decomposition analysis (SDA), index decomposition analysis (IDA), and productiontheoretical decomposition analysis (PDA) [20,[24][25][26][27][28][29]; data envelopment analysis (DEA) [30][31]; causality relationship analysis [32][33]; indicator analysis [34]; scenario analysis [35][36]; and system dynamics (SD) model [7,[36][37]. Whether it is a top-down approach, a bottom-up approach, or a hybrid model, each method has strengths and weaknesses and plays important roles in the study of CO 2 emissions.…”

Decoupling and Decomposition Analysis of Carbon Emissions from Electric Output in the United States

“…Table 1 summarizes some typical studies of the US, which are closely related to our research. The main features of these studies include the methodology employed and the main findings [54][55][56][57][58][59][60][61][62]. Most previous studies have tended to decompose the energy-related CO 2 emissions of a sector from an economic aspect, using gross domestic product (GDP) or per capita GDP as one of the influencing factors.…”