GLOBAL METHANE EMISSION: PATTERNS AND KUZNETS HYPOTHESIS

Abstract

he paper seeks to find out the structure, nature, and patterns of global methane and carbon-dioxide emissions from 1970 to 2018. The paper endeavors to verify the Environmental Kuznets Curve hypothesis for both the global emissions for the specified period. Moreover, the paper tries to show the cointegrating relationships and long-run causalities from global GDP per capita to both the global methane and carbon-di-oxide emissions. Using a semi-log and double regression model and cointegration and VEC model the paper concludes that the global methane emission increased by 1.06% per year significantly during 1970-2018 in comparison with 1.85% per year of global CO2 emission. Actually, global methane emission is cubic in nature whereas CO2 emission is quadratic. The methane emission contains four upward structural breaks as against five upward structural breaks of CO2 emission. Both of them have significant inverse S type cyclical trends in the H.P. Filter model. In the forecasting model of ARIMA (1,1,1) for 2050, global methane is stable and nonstationary but global CO2 emission is stable and stationary showing convergent patterns. Both methane and CO2 emissions have been absolutely decoupled from GDP per capita square and relatively decoupled from GDP per capita cube during 1970-2018 significantly which indicates that global methane and CO2 emission follow the Environmental Kuznets Curve hypothesis. Global methane emission is cointegrated with GDP per capita having one cointegrating equation where cointegrating equation moves to the equilibrium and CO2 emission has two cointegrating equations which also move to equilibrium significantly, i.e. both methane and CO2 emissions have long-run causality from GDP per capita from 1970 to 2018.