The Impact of Population on CO2 Emissions: Evidence from European Countries

Abstract

SummaryThis paper analyses the impact of population growth on CO2 emissions in European Union countries. Traditionally, researchers have assumed a unitary elasticity of emissions with respect to population growth. In this study population is treated as a predictor in the model, instead of being included as part of the dependent variable (per capita emissions), thus relaxing the above-mentioned assumption of unitary elasticity. We also contribute to the existing literature by taking into account the presence of heterogeneity in the sample and considering a dynamic specification. The sample covers the period 1975-1999 for the current European Union members. Our results show that the impact of population growth on emissions is more than proportional for recent accession countries whereas for old EU members, the elasticity is lower than unity and non significant when the properties of the time series and the dynamics are correctly specified. The different impact of population change on CO2 emissions for the current EU members should therefore be taken into account in future discussions of climate change policies within the EU.

When does economic development promote mitigation and why?

“…Moreover, the random effect term, u 1 , is highly significant at the 0.001 level, showing that per capita GDP is indeed a significant driver of emissions trends, but has different effects on different countries. 18 The countryyear level R-squared term and LR test result confirm that the RCM performs much better than the RIM and equivalent OLS. 19 Strikingly, the new model explains 91.61% of country-year variance, a significant improvement from the 13.1% R-squared value in the RIM.…”