Divergence in State-Level Per Capita Carbon Dioxide Emissions

This paper addresses the question of whether income convergence is sufficient for per capita carbon dioxide (CO2) emissions convergence by focusing on a set of advanced economies, the U.S. states. I undertake a variety of cross-sectional and stochastic convergence tests with two novel measures of 1960 to 1999 state-level CO2 emissions per capita: production (pre-electricity trade) CO2 and consumption (post-electricity trade) CO2, and with income per capita. Although incomes continue to converge, I find stark divergence in production CO2 per capita and no evidence of convergence for consumption CO2 per capita. Forecasts of future distributions show little convergence in emissions. (JEL Q54, Q56)