Convergence of carbon dioxide emissions in the Americas and its determinants

Abstract

This paper investigates the convergence behaviour of carbon dioxide emissions for 39 countries in the Americas from 1960-2016. A linear regression test of convergence which looks for conditional sigma convergence is employed, and a clustering algorithm is used to identify convergence clubs. The results show evidence of convergence in the region for the long run. Convergence clubs are identified for the short run. The convergence clubs show some relation to spatial distribution and income level. Possible factors determining the formation of convergence clubs are investigated through logistic regression. Initial level of emissions and energy intensity were found to have the largest impact determining what convergence club a country belongs to. Per capita GDP, trade openness, and renewable energy were all found to be highly significant factors determining what convergence club a country belongs to as well. Different results were found for urbanization’s impact in determining the formation of convergence clubs. These findings show that policymakers should promote allocation schemes for carbon dioxide emissions. Policymakers should also aim to reduce carbon footprint based on the economy’s structural characteristics.