To read the full version of this content please select one of the options below:

Population ageing, income growth and CO2 emission: Empirical evidence from high income OECD countries

Kamrul Hassan (Department of Finance, School of Management and Governance, Murdoch University, Perth, Australia)
Ruhul Salim (School of Economics & Finance, Curtin Business School, Curtin University, Perth, Australia)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 12 January 2015

Abstract

Purpose

The purpose of this paper is to attempts to explore the relationship between population ageing, income growth and CO2 emission in 25 high-income Organization for Economic Cooperation and Development (OECD) countries in the framework of environmental Kuznets curve (EKC).

Design/methodology/approach

Following Zagheni (2011) and using a relatively new cointegration technique and fully modified ordinary least square in a panel data over 1980-2009 the empirical results find evidence of inverted-U shaped EKC in these OECD countries.

Findings

The empirical results demonstrate that per capita CO2 emission (PCCO2) increases initially with economic growth; however, after reaching a per capita income level of US$ 24,657 it starts falling. With regard to ageing, the cointegrating vector indicates that a one percent increase in the share of aged population will reduce PCCO2 by 1.55 percent in the long run.

Originality/value

This is one of the first studies that examine the effect of population ageing on CO2 emission in a panel setting. The paper consider the cross-sectional dependence and use unit root test suitable for cross-sectional-dependent variables. The paper also examine short-run and long-run dynamics of EKC with panel cointegration and panel error correction methods.

Keywords

Acknowledgements

JEL Classification – Q56, C33, O10

The authors are grateful to two anonymous referees and the editor Professor Mohsen Bahmani-Oskooee for helpful comments and suggestions which improve the quality and presentation of this paper. However, authors are solely responsible for any error remains.

Citation

Hassan, K. and Salim, R. (2015), "Population ageing, income growth and CO2 emission: Empirical evidence from high income OECD countries", Journal of Economic Studies, Vol. 42 No. 1, pp. 54-67. https://doi.org/10.1108/JES-04-2013-0046

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited