Is the Green Solow Model Valid for $$\hbox {CO}_{2}$$ CO 2 Emissions in the European Union?

Abstract

This paper addresses the $$\hbox {CO}_{2}$$ emission patterns of the European Union from 1950 to 2010, and examines the validity of the Green Solow model, which simulates $$\hbox {CO}_{2}$$ emissions growth by including only Solow forces and assuming emission intensity growth to be exogenous and constant. This study verifies that an environmental Kuznets curve (EKC) trajectory exists for per capita $$\hbox {CO}_{2}$$ emissions in the European Union, that emission intensity growth is decreasing over time, and that the decreasing intensity growth reflects variations of the dependent variable in the specifications of the Green Solow model. The critique by Stefanski (On the mechanics of the Green Solow model. OxCarre Research Paper 47, OxCarre & Laval University, Oxford, 2013) of the Green Solow model assumption of exogenous and constant intensity growth is validated. The EKC is defined as the emissions plotted against income and emission intensity is defined as the ratio of emissions to income. The EKC and emission intensity share identical definitions and similar transition trajectories over time. The transition of the EKC trajectory and decline in emission intensity growth began before worldwide attention was focused on global warming.