Abstract:

This paper tests the stochastic convergence hypothesis of per capita greenhouse gas emissions among G7 countries over the period from 1990 through 2014. In testing stochastic convergence, we transfer per capita greenhouse gas emissions in level, relative to the average by using methodology of Carlino and Mills (1993, 1996) and investigate unit root properties of these obtained relative series by using recently developed unit root test of Narayan and Popp(2010) besides conventional unit root tests. Conventional unit root test results indicate that stochastic convergence hypothesis is supported only for France and United States. On the other hand, when we take into account existence of possible structural breaks, the results provide significant support for stochastic convergence of relative per capita greenhouse gas emissions for France, Japan, United Kingdom and United States and divergence for Canada, Germany and Italy.

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