Convergence of per capita carbon dioxide emissions among developing countries: evidence from stochastic and club convergence tests.

This exploratory study extends the literature on the convergence of per capita carbon dioxide emissions in analyzing stochastic and club convergence within a panel framework for developing countries. The results from Pesaran (Journal of Applied Econometrics, 22(2), 265-312, 2007) and Bai and Carrion-i-Silvestre (Review of Economic Studies, 76(2), 471-501, 2009) panel unit root tests with allowance for cross-sectional dependence confirm stochastic convergence for low-income, lower middle-income, and combined country panels. Further analysis using the nonlinear time-varying factor model of Phillips and Sul (Econometrica, 75(6), 1771-1855, 2007; Journal of Applied Econometrics, 24(7), 1153-1185, 2009) to test for convergence reveals the emergence of multiple convergence clubs within each of the three country panels examined. We observe geographic proximity among many of the countries within the respective convergence clubs.