The determinants of the inequality in CO2 emissions per capita between developing countries

Abstract

We analyze the differences in CO2 emissions per capita between developing countries and how these are influenced by a series of affluence, structural, demographic and climatic variables. We first perform a regression analysis to ascertain the determinants of CO2 emissions, providing new evidence for the case of developing countries. The results indicate an N-shaped relationship with GDP per capita and a negative impact of the agriculture share and average daily minimum temperatures, while urbanization and the share of potentially active population would be positively correlated with emissions per capita. By using the regression-based inequality decomposition method, our analysis indicates the weight of each significant determinant in explaining the inequality in CO2 emissions per capita between developing countries. The main contributor to this inequality is economic affluence, while the potentially active population factor is the second main contributor. We study their change over time and the relevance of each factor in the changes experienced by inequality. Some of our results contrast with similar studies for more heterogeneous samples including developed countries. We derive some implications for environmental policy in developing countries.