Emissions and economic development in commodity exporting countries

This paper uses data for 46 commodity-exporting countries between 1990 and 2014 to show that, in order to get a clear picture of decoupling between emissions and economic development, it is important to distinguish cycles from trends. By means of time series and panel data techniques, our results suggest that, there is a cyclical relationship between emissions and output - what we call the Environmental Okun's Law - that policymakers may fail to see, strong is some countries, absent in others. Moreover, while the sample average trend – or Kuznets – elasticity is 0.6, some countries have negative elasticities, suggesting that they had managed to transition to a low-carbon path. Finally, globalization has played a relevant role and that accounting for cross-border trade - that is, for net emission transfers from international trade - matters.