The Relation Between Economic Activity and CO2 emissions: Is There a GDP Growth Consistent with No Growth in CO2 Emissions?

This paper offers estimates of the per-capita GDP growth trajectories consistent with zero CO₂ emissions. The focus is on six developed economies (Canada, Germany, Italy, Japan, Singapore, United States) and six emerging economies (China, India, Indonesia, Malaysia, Mexico, South Korea). To this end, we postulate model linking per-capita CO₂ emissions growth to per-capita GDP growth and technology. Parameter estimation relies on annual data from 1980 to 2022 using Ordinary Least Squares (OLS) and Instrumental Variables (IV). Given the parameter estimates, we use the model to estimate the growth rate of per-capita GDP that is consistent with zero growth in CO2 emissions.