Have greenhouse gas emissions from US energy production peaked? State level evidence from six subsectors

Abstract

Analyses of the Environmental Kuznet’s Curve (EKC) hypothesis have largely focused on economy level data with occasional analyses exploring sector level data. This paper exploits a new data set which contains sector level data on greenhouse gas emissions from the US energy sector as well as subsector data from six disjoint subsectors which together comprise the entire energy sector. The data contained in this data set is annual data at the state level from 1990 through 2011. Using differenced data, we specify an econometrically sound EKC model and compare it against a model containing only a linear GDP per capita term. We find that using a subsector level modeling approach, evidence for the EKC hypothesis is virtually nonexistent. Moreover, we find that aggregated subsector level estimates outperform sector-level estimate on in-sample accuracy. These estimated models are then used to forecast emissions for the energy sector. We find evidence that US greenhouse gas emissions from energy production are at or near a peak.