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This paper intends to test the non-linear relationship between CO2 emissions and income by employing cointegration model of the time-varying income elasticity. We select France, UK, Italy, Japan, US, China, India, Mexico and Korea and use non-parametric time series analysis on each country in order to estimate its own effect of income on CO2 emission. The main results indicate that the CO2 emission-income elasticities vary over time and the income elasticities of the Annex I countries tend to be higher in absolute terms than those of developing countries. In addition, we find that emission-income elasticities decrease for Annex I countries over time, whereas those for developing countries increase.

Time-Varying Income Elasticity of CO2emission Using Non-Linear Cointegration

Time-Varying Income Elasticity of CO₂emission Using Non-Linear Cointegration