CO2 Emissions and Economic Growth in the Latin American Region
Keywords:
pollution, economic development, environment, Latin America, time seriesAbstract
The objective of this paper is to verify the econometric causal relationship between CO2 emissions and economic growth in a sample of six Latin American countries from 1990 to 2019 (Argentina, Brazil, Colombia, Chile, Mexico, and Peru). The hypothesis is that the greater the economic activity measured by GDP, the greater the emission of pollutants, particularly CO2. To verify it, time series taken from ECLAC of CO2 emissions in thousands of tons and total GDP in millions of dollars were used. Stationarity of the series was evaluated, VAR models were estimated, impulse-response functions, cointegration and Granger causality were calculated and finally, the variance decomposition method was applied. The main result was that for the region there is correlation and cointegration between the series studied; however, no causality was found in the Granger sense, although it is shown that the variance of CO2 emissions, after a 10-year shock, seems to be explained on average by 78% by the variance of GDP. This result, with some differences, remains at the level of the six countries in the sample. Therefore, it is urgent to move towards sustainable growth.
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