Asymmetric business cycle changes in US carbon emissions and oil market shocks

Previous research shows that, in the USA, the elasticity of carbon emissions with respect to GDP is greater when GDP declines than when GDP increases. Using monthly US data, we examine each individual recession since 1973. We find asymmetric changes in carbon emissions in the 1973–1975, 1980, 1990–1...

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Bibliographic Details
Published inClimatic change Vol. 176; no. 11; p. 147
Main Authors Jiang, Xueting, Stern, David I.
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Netherlands 01.11.2023
Springer Nature B.V
Subjects
Asymmetry
Atmospheric Sciences
Business cycles
Carbon
Carbon emissions
Climate change
Climate Change/Climate Change Impacts
Earth and Environmental Science
Earth Sciences
Elasticity
Emissions
Oil
United States > US
COVID-19
Climate change
Q43
Q54
Recessions
Economic growth
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Summary:Previous research shows that, in the USA, the elasticity of carbon emissions with respect to GDP is greater when GDP declines than when GDP increases. Using monthly US data, we examine each individual recession since 1973. We find asymmetric changes in carbon emissions in the 1973–1975, 1980, 1990–1991, and 2020 recessions but not in the 1981–1982, 2001, or 2008–2009 recessions. The former four recessions are associated with negative oil market shocks. In the first three, there was a supply shock and in 2020, a demand shock. Changes in oil consumption that are not explained by changes in GDP explain these asymmetries. Furthermore, the asymmetries are due to emissions in the transport and industrial sectors, which are the main consumers of oil. We conclude that emissions behaved similarly in 2020 to the way they did in recessions associated with oil supply shocks, but, actually, this pattern is not inherent to the business cycle itself.
ISSN:0165-0009
1573-1480
DOI:10.1007/s10584-023-03620-2