Measuring Economic Development and Carbon Dioxide Emissions Inefficiency

Abstract

Excessive emissions of greenhouse gases have exacerbated global climate change, and the use of fossil fuels is the main reason for the rapid rise of CO2 in the atmosphere. In this study, stochastic frontier analysis is employed to measure the causal relationship between GDP growth and fossil fuel use for CO2 inefficiency of APEC member economies. The empirical results revealed a significant positive correlation between them and found that member economies with a high per capita GDP, such as Singapore, effectively mitigate CO2 emissions. This result revealed that high income standards lead to emphasis on environmental protection. China and the United States are the top two CO2 emitters and should actively formulate carbon reduction strategies for economic development and energy utilization. This study calls for both developing and developed countries to gradually adopt and increase renewable energy and develop low-carbon technologies to reduce greenhouse gas emissions and jointly address the challenges of climate change.