Convergence in CO 2 emissions: A spatial economic analysis with cross-country interactions

This research analyzes the evolution of CO2emissions per capita in a sample of 141 countries during the period 1970–2014. The study develops a spatially augmented Green Solow model by taking into consideration technological externalities and interdependence in the process of production, which ultimately implies that CO2emissions in an economy are affected by the economic characteristics in neighboring countries. The empirical model predicts convergence in CO2emissions among countries which is examined by means of modern dynamic spatial panel econometric techniques. The multimodal distribution of the CO2emissions is consistent with the existence of three spatial clubs. The space-time dynamics of the three clubs are analyzed by means of the Local Directional Moran Scatterplot and spatial panel model with heterogeneous parameters. Our analysis reveals the hypothesis of spatial convergence clubs is more consistent with the data than the hypothesis of conditional convergence.