The environmental convergence hypothesis: Carbon dioxide emissions according to the source of energy

The aim of this paper is to investigate the environmental convergence hypothesis in carbon dioxide emissions for a large group of developed and developing countries from 1980 to 2009. The novel aspect of this work is that we distinguish among carbon dioxide emissions according to the source of energy (coal, natural gas and petroleum) instead of considering the aggregate measure of per capita carbon dioxide emissions, where notable interest is given to the regional dimension due to the application of new club convergence tests. This allows us to determine the convergence behaviour of emissions in a more precise way and to detect it according to the source of energy used, thereby helping to address the environmental targets. More specifically, the convergence hypothesis is examined with a pair-wise test and another one is used to test for the existence of club convergence. Our results from using the pair-wise test indicate that carbon dioxide emissions for each type of energy diverge. However, club convergence is found for a large group of countries, although some still display divergence. These findings point to the need to apply specific environmental policies to each club detected, since specific countries converge to different clubs.