Consumption-based and territory-based carbon emissions intensity: Determinants and forecasting using club convergence across countries

Understanding the dynamics of carbon emissions across time and space is important when formulating energy policies to minimise climate changes in the future. If per capita carbon emissions (or carbon intensity) converge over time, then any negotiation of multilateral agreements will be easier than if convergence is absent. It is also possible for club convergence to exist where countries within a club converge but countries between clubs do not converge. We examine the convergence of consumption-based and territory-based carbon emissions intensity across 70 countries. We find two convergent clubs for consumption-based emissions and three convergent clubs for territory-based emissions. Increases in each of total factor productivity, renewable energy consumption and urbanisation increase the odds of belonging to a low carbon emissions intensity club. An increase in industry value added reduces the odds of belonging to a low carbon intensity club. Increases in total factor productivity can be obtained through effective macroeconomic policy, while increasing renewable energy consumption may require structural changes in economies focused on transitioning to a low carbon economy. Under a business as usual forecasting scenario the number of consumption-based carbon emissions intensity clubs increases between 2014 and 2030 making it more difficult to negotiate multilateral agreements on climate change in the future.