The relationship between greenhouse gas emissions and macroeconomic variables: Panel data analysis for OECD countries

Climate change , which is considered as one of the greatest challenges the world faces today, results from increases in greenhouse gas emissions because of human activities and increases in greenhouse gas concentrations. UN developed a variety of policies and tools to mitigate this environmental issue, the aim of which is to reduce greenhouse gas emissions. In this context, The United Nations Framework Convention on Climate Change, which was put into force on 21st March and Kyoto Protocol on 16th February 2005, are the most important attempts to prevent global warming. A variety of policies and tools have been developed by KP and UNFCCC to cope with increasing ghg emissions. In this study, the relationship between greenhouse emissions with macroeconomic variables was studied, for OECD countries, using 1971-2011 data through panel data analysis. At this stage it is necessary to do cross-sectional dependency research to determine the tests to be used. As a result of the cross-sectional dependency test, it was observed that there is cross-sectional test between the countries. Of the second generation unit root tests, CADF and CIPS, which takes this situation into consideration, was used to test it and it was observed that series are not stationary at the level values. The existence of cointegration relation between series was examined through Westerlund Durbin Hausman Test; and it was confirmed that there was cointegration relation between series. In the end, long-term cointegration coefficient of cointegrated model was estimated through estimation method based on the Common Correlated Effect developed by Pesaran (2006b).