Convergence of per capita carbon dioxide emissions among developing countries: evidence from stochastic and club convergence tests

Abstract

This exploratory study extends the literature on the convergence of per capita carbon dioxide emissions in analyzing the stochastic and club convergence within a panel framework for developing countries. The results from Pesaran (2007) and Bai and Carrion-i-Silvestre (2009) panel unit root tests with allowance for cross-sectional dependence confirm stochastic convergence for low-income, lower-middle income, and combined country panels. Further analysis using the nonlinear time-varying factor model of Phillips and Sul (2007; 2009) to test for convergence reveals the emergence of multiple convergence clubs within each of the three country panels examined. We observe geographic proximity among many of the countries within the respective convergence clubs.