Population Age Structure and Greenhouse Gas Emissions from Road Transportation: A Panel Cointegration Analysis of 21 OECD Countries

Abstract

Using panel data from 21 Organization for Economic Cooperation and Development (OECD) countries collected between 2000 and 2016, this study analyzes the effect of age structure on greenhouse gas (GHG) emissions from road transportation. Previous studies have failed to reflect the driver’s behavior patterns, especially by age group. We apply the Fully-Modified Ordinary Least Squares (FMOLS) method, including the age structure effect by reorganizing 17 age groups into a polynomial structure. The age structure exhibits an asymmetric inverted U-shaped effect on GHG emissions. Initially, people emit more GHGs as they age, and reach peak emissions in their late 20s, after which emissions fall until around the age of 70, when GHG emissions remain constant because of minimum mobility demand. Factors, such as higher income, increased vehicle ownership, and raised transport volumes increase emission rates. On the other hand, fuel transition and increased fuel price, population density, urbanization rate, and fuel economy reduce GHG emissions. Furthermore, we perform a projection of GHG emissions until 2050, and conclude that the effect of age structure is limited because of the minimum mobility demand of the elderly. We conclude that various policy measures, such as increased fuel economy and urbanization, must be considered in order to achieve sustainable transport