Are Carbon Dioxide Emissions Decoupled from GDP Growth in Well-functioning Democracies?

Abstract

Empirical studies of the relationship between GDP per capita and country-level CO2 emissions tend to focus on the direct effect of per capita GDP growth, rarely taking political institutions into consideration. This paper introduces theoretical insights from environmental political science research, which suggests that CO2 emissions models would gain explanatory leverage if moderators gauging political institutions were considered. We test these theories by estimating the potentially moderating effects of democracy, corruption, veto points and players, and civil society activity. Our results suggest a positive and linear per capita GDP-CO2 relationship, which is barely affected by any variations in political and institutional factors. The only significant moderator in our analysis is bicameralism in democratic, low corrupt countries, which generates a stronger effect of per capita GDP growth at low levels of GDP per capita. Our analysis thus lends rigor to studies in environmental economics that find a positive and linear per capita GDP-CO2 relationship, and does not provide support for theories common in environmental political science research.