Energy and Carbon Dynamics at Advanced Stages of Development: An Analysis of the U.S. States,1960-1999

Abstract

This paper explores the relationships among per capita income, energy consumption, and carbon dioxide (CO2) emissions by focusing on a set of economies at advanced stages of development, the U.S. states. Energy consumption and emissions grew 50-60percent on average over the 1960-1999 period. The states’ per capita energy consumption and emissions have grown on average 2 percent annually. The energy consumption income elasticity is positive but decreasing in income, although energy production takes an inverted- U shape, reflecting the electricity imports among high income states. The standard CO2 measure, corresponding to energy production, is characterized by an inverted-U environmental Kuznets curve. Adjusting emissions for interstate electricity trade yields an emissions-income relationship that peaks and plateaus. The carbon intensity of energy declines with income for total energy consumption and the industrial, residential, and commercial sectors.