Research by Eric Fruits and Randall Pozdena found that economic output, energy use, and carbon dioxide emissions have been tightly cointegrated historically. They calculated that a 1 percent decline in carbon dioxide emissions would be associated with a 0.71 percent decline in gross domestic product (GDP), a widely used measure of national income.

A recent working paper using a time series covering more than 140 years found almost exactly the same relationship. The authors conclude that changes in carbon dioxide emissions and changes in GDP are cointegrated. They calculate that over the long run, a 1 percent decline in carbon dioxide emissions would be associated with a 0.74 percent decline in GDP.

Citation:
Annicchiarico, B., Bennato, A. R., and Costa, A. (2009). Economic growth and carbon dioxide emissions in Italy, 1861-2003. MPRA Paper No. 12817.

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