Discussion Paper

Per Capita Carbon Dioxide Emissions: Convergence or Divergence?

Nov 23, 2005 | Joseph E. Aldy

Abstract

Understanding and considering the distribution of per capita carbon dioxide (CO2) emissions is important in designing international climate change proposals and incentives for participation. I evaluate historic international emissions distributions and forecast future distributions to assess whether per capita emissions have been converging or will converge. I find evidence of convergence among 23 member countries of the Organisation for Economic Co-operation and Development (OECD), whereas emissions appear to be diverging for an 88-country global sample over 1960–2000. Forecasts based on a Markov chain transition matrix provide little evidence of future emissions convergence and indicate that emissions may diverge in the near term. I also review the shortcomings of environmental Kuznets curve regressions and structural models in characterizing future emissions distributions.

Most long-term forecasts of carbon dioxide (CO2) emissions focus on the growth in global emissions, with little attention paid to the distribution of emissions. The geographic distribution of CO2 and other greenhouse gas emissions, and especially per capita measures of these emissions, does not influence the climatic impact of those emissions - but it may affect the political economy of negotiating multilateral climate change agreements.

Developing countries with lower per capita emissions may expect industrialized countries with higher per capita emissions to make more effort toward mitigating climate change. This discrepancy may reflect industrialized countries' larger contribution to climate change (a "responsibility" notion of equity) or greater resources (an "ability to pay" notion). In lieu of periodically renegotiating ad hoc emissions obligations, some policymakers have suggested a per capita emissions allocation rule to encourage the participation of developing countries. Under such a scheme, rights to the atmosphere would be allocated among all countries according to population.

Political attention to per capita emissions levels could pose challenges to multilateral negotiations. If developing countries' per capita emissions do not converge toward industrialized countries' levels, developing countries may be less likely to agree to emissions abatement obligations and industrialized countries less likely to support a per capita allocation rule.

To inform the policy debate on these issues, RFF Fellow Joseph Aldy evaluates historic and estimates future distributions of per capita carbon dioxide emissions in Per Capita Carbon Dioxide Emissions: Convergence or Divergence?.

He conducts two sets of assessments: one for the member states of the Organisation of Economic Co-operation and Development (OECD) and one for a larger, globally representative set of 88 countries. Over 1960- 2000, the low per capita emissions OECD countries have experienced faster emissions growth than the high per capita emissions OECD countries, resulting in fairly substantial convergence in their emissions distributions. In contrast, he finds no evidence of convergence among the 88 countries comprising the international dataset, and indeed, the distribution is more dispersed now than in 1960.

Through a variety of forecasts, Aldy shows that the global distribution of per capita CO2 emissions may diverge further over the rest of this century. This analysis suggests that near-term economic development will not close the gap between developing and industrialized countries' per capita emissions and could complicate efforts to design a future climate change policy architecture.