Economic Growth, Sectoral Structures, and Environmental Methane Footprints

We analyze the impacts of economic growth on methane emissions per capita at the sectoral level for the period 1997-2014. We cover three stages of the supply chain, distinguishing between emissions embodied in production, final-production, and consumption. We investigate the effects of economic growth on two components of methane emissions per capita, namely methane emissions per value added and value added per capita. We uncover substantial heterogeneity across sectors. Economic growth led to expansions of economic activity in all sectors, but reduced the methane intensity of sectoral value added. In sectors that experienced pronounced reductions in methane intensity, economic growth did not strongly affect emissions per capita. However, in the absence of methane-intensity gains, economic growth raised emission per capita substantially.

This paper is forthcoming in Applied Economics.