Energy consumption and CO2 emissions in North America
Keywords:
Energy consumption, CO2, stochastic convergence, unit root tests, North AmericaAbstract
Stochastic convergence analysis is useful to evaluate the efficiency or inefficiency of economic policies in the medium and long term if the stationarity of the time series studied is known. In this article, we examine the stochastic convergence in primary energy consumption and carbon dioxide (CO2) emissions in Ca-nada, Mexico, and the United States during the period 1965 to 2019. The methodology of this study is based on the application of traditional (Augmented Dickey Fuller and Phillips-Perron) and last-generation (LM and RALS-LM) unit roots tests to the relative per capita primary energy consumption and per capita CO2 emissions of the three countries. With the econometric analysis carried out, we conclude that both energy consumption and CO2 emissions are divergent in North America. If we solely focus on the period of the North American Free Trade Agreement (NAFTA), we prove the existence of stochastic convergence in primary energy in the United States and emissions of pollutants in Canada. The Mexican economy is divergent in both variables. The governments of the three countries should focus on the introduction of common policies to bolster energy efficiency and reduce pollutants.
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