On the examination of the decoupling effect of air pollutants from economic growth: A convergence analysis for the US

The objective of this study is to examine the convergence patterns of decoupling factors of three environmental hazards (CO2, SO2, and NOX) from economic growth across the U.S. regions over the period 1990-2017. By applying the Phillips and Sul (2007, 2009) methodology, we unravel convergence clubs and illustrate their transition paths. The generic algorithm rejects the convergence hypothesis for the whole sample, justifying the existence of several formulated convergence clubs among the US regions. The empirical findings further elucidate the existence of two “large” spatial clusters concerning the CO2 and SO2 decoupling indicators (Club 2 and Club 1 respectively). Lastly, the transition paths validate the P-S convergence test results, while we provide some useful policy implications.