Climate Change Policy: Dynamics, Strategy, and ... · Climate Change Policy: Dynamics, Strategy,...

Climate Change Policy: Dynamics, Strategy, and Technological Change1

Saleh Zakerinia, C.-Y. Cynthia Lin Lawell, Burkhard Schipper, and James E. Wilen

April 2017

Abstract

Climate change is a “tragedy of the commons” problem since greenhouse gas

emissions from any one country contribute to the total stock of global greenhouse

gases in the earth’s atmosphere, which affects all countries. When a country

decides to design a climate policy, in most cases, it considers its own benefits and

costs and does not consider the benefits and costs to other countries. As a result,

each country has an incentive to free ride on the climate policy of other countries.

In this paper, we use machine learning and structural econometric modeling to

develop and estimate a structural econometric model of the dynamic game among

countries making dynamic and strategic decisions regarding energy and

environmental policy in the face of technological change. We examine how

economic factors, energy security concerns, technological development, and the

energy and environmental policies of other countries impact a country’s energy and

environmental policy. We use the estimated parameters to simulate the effects of

counterfactual scenarios, situations, and institutions on climate change policy,

emissions, economic outcomes, and welfare. Our empirical study has important

implications for decision-making and policy design.

Keywords: climate change policy, structural econometric model, dynamic game,

international environmental agreements

JEL codes: Q58, Q54, Q48

1 Zakerinia: University of California at Davis; [email protected]. Lin Lawell: University of California at

Davis; [email protected]. Schipper: University of California at Davis: [email protected]. Wilen:

University of California at Davis; [email protected]. We thank Charles Kolstad for invaluable comments

and discussions. Lin Lawell and Wilen are members of the Giannini Foundation of Agricultural Economics. All

errors are our own.

mailto:[email protected]




1. Introduction

Climate change has the potential to cause catastrophic damages worldwide (Ramanathan

et al., 2016). In order to address climate change, it is important for countries around the world to

reduce their greenhouse gas emissions. However, climate change is a “tragedy of the commons”

problem since greenhouse gas emissions from any one country contribute to the total stock of

global greenhouse gases in the earth’s atmosphere, which affects all countries. Efforts by any one

country to reduce its own greenhouse gas emissions are costly and require a substantial change in

that country’s energy and transportation systems. When a country decides to design a climate

policy, in most cases, it considers its own benefits and costs and does not consider the benefits and

costs to other countries. As a result, each country has an incentive to free ride on the climate policy

of other countries.

In the absence of a supranational institution that is endowed with the appropriate

jurisdiction to enforce a global environmental target, each country sets its own climate policy based

on its own interests and priorities. However, the monetary and political costs of these policies, the

economic structure of different countries, and uncertainty in the future damages of climate change

cause individual countries to postpone or free ride on other countries’ efforts to reduce greenhouse

gas emissions.

In this research, we use machine learning and structural econometric modeling to develop

and estimate a structural econometric model of the dynamic game among countries making

dynamic and strategic decisions regarding energy and environmental policy in the face of

technological change.

The structural econometric model enables us to answer the three primary research

questions. First, how do economic factors, energy security concerns, and technological

development impact the energy and environmental policy of different countries? Second, how do

the energy and environmental policies of other countries affect a country’s energy and

environmental policy? And third, how should environmental and energy policies be designed to

increase the welfare of firms, individuals, countries, and society?

Our structural econometric estimation takes place in two stages. In the first stage, we use

econometrics and machine learning techniques to characterize the equilibrium policy functions for

the countries' decisions regarding their environmental policies as well as the transition functions,

and apply these techniques to annual data on country-level economic, demographic, political, and

social variables and global variables such as global temperature and world oil price. In the second

stage, we apply a simulated minimum distance estimator to estimate structural parameters using

the optimality conditions for a Markov perfect equilibrium in order to estimate parameters that

minimize profitable deviations from the optimal strategy. Using the parameters estimates of our

structural econometric model, we can simulate the effects of counterfactual scenarios, situations,

and institutions on climate change policy, emissions, economic outcomes, and welfare.

There is a large body of literature that studies the economics of climate change and the

costs and benefits of reducing greenhouse gas emissions at different levels. The main research

question in these studies focuses on determining the optimal level of abatement. However, our

study is the first to date to our knowledge that empirically estimates the dynamic game between

different countries in setting their climate policy in the face of technological change using a

structural econometric model.

Applying a dynamic structural modeling framework to analyze strategic decisions

regarding energy and environmental policy in the face of technological change has several

advantages. First, unlike reduced-form models, a dynamic structural econometric model explicitly

models the dynamics of countries’ environmental decisions. Moreover, a structural econometric

model of a dynamic game can capture the strategic nature of countries’ environmental decisions

as well. Second, a structural model enables us to estimate the impact of each state variable on the

expected payoffs from environmental decisions; we therefore estimate parameters that have direct

economic interpretations. Third, our structural model captures the expected value of the value

function of next period (i.e., the continuation value). We are able to estimate parameters in the

payoffs from environmental decisions since our structural model can relate the continuation values

to the payoffs from environmental decisions. Fourth, we can use the estimated parameters to

simulate the effects of counterfactual scenarios, situations, and institutions on climate change

policy, emissions, economic outcomes, and welfare.

Our research develops an empirical model of the dynamic game among countries making

dynamic and strategic decisions regarding energy and environmental policy. Its results will be of

interest to academics, policy-makers, business practitioners, and environmental advocacy groups

alike. Moreover, our model of strategic and dynamic decision-making by countries and of the

effects of economic factors, strategic factors, and institutions on the decision-making behavior and

its outcome will help policy-makers better design policy. Our empirical study therefore has

important implications for decision-making and policy design.

2. The Kyoto Protocol

The United Nations Framework Convention on Climate Change (UNFCCC or FCCC) is

an international environmental treaty produced at the United Nations Conference on Environment

and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro from

3 to 14 June 1992. The objective of the treaty is to stabilize greenhouse gas concentrations in the

atmosphere at a level that would prevent dangerous anthropogenic interference with the climate

system (Minerva, 2016).

The treaty itself sets no mandatory limits on greenhouse gas emissions for individual

countries and contains no enforcement mechanisms. In that sense, the treaty is considered legally

non-binding. Instead, the treaty provides for updates (called "protocols") that would set mandatory

emission limits. The principal update is the Kyoto Protocol, which has become much better known

than the UNFCCC itself (Minerva, 2016).

The UNFCCC was opened for signature on May 9, 1992, after an Intergovernmental

Negotiating Committee produced the text of the Framework Convention as a report following its

meeting in New York from 30 April to 9 May 1992. It entered into force on March 21, 1994. As

of December 2009, UNFCCC had 192 parties (Minerva, 2016).

One of its first tasks was to establish national greenhouse gas inventories of greenhouse

gas (GHG) emissions and removals, which were used to create the 1990 benchmark levels for

accession of Annex I countries to the Kyoto Protocol and for the commitment of those countries

to GHG reductions. Updated inventories must be regularly submitted by Annex I countries

(Minerva, 2016).

The parties to the convention have met annually from 1995 in Conferences of the Parties

(COP) to assess progress in dealing with climate change. In 1997, the Kyoto Protocol was

concluded and established legally binding obligations for developed countries to reduce their

greenhouse gas emissions (Minerva, 2016).

During the COP 3 in Kyoto, Japan in December 1997, the global community adopted the

Kyoto Protocol on Climate Change, which outlined the greenhouse gas emissions reduction

obligation for Annex I countries, along with what came to be known as Kyoto mechanisms such

as emissions trading, clean development mechanisms, and joint implementation. Most

industrialized countries and some central European economies in transition (all defined as Annex

B countries) agreed to legally binding reductions in greenhouse gas emissions of an average of 6

to 8% below 1990 levels between the years 2008–2012, defined as the first emissions budget

period. The United States would be required to reduce its total emissions an average of 7% below

1990 levels; however, Congress did not ratify the treaty after Clinton signed it. The Bush

administration explicitly rejected the protocol in 2001 (Minerva, 2016). Table 1 shows Kyoto

targets adopted during COP 3.

During COP 18, which took place in Doha, Qatar in November 2012, the Doha Amendment

was made to the Kyoto Protocol (to be accepted before entering into force) featuring an second

commitment period running from 2012 until 2020 limited in scope to 15% of the global carbon

dioxide emissions due to the lack of commitments of Japan, Russia, New Zealand (nor the United

States and Canada, who are not parties to the Protocol in that period) and due to the fact that

developing countries like China (the world's largest emitter), India and Brazil are not subject to

emissions reductions under the Kyoto Protocol. Parties also completed a registry to record

developing country mitigation actions that seek recognition or financial support (Doha Climate

Gateway, 2012). Table 2 shows Kyoto targets adopted during COP 18.

3. Literature Review

3.1. International environmental agreements

One strand of literature upon which we build is that on international environmental

agreements.

Weitzman (2016) postulates a “World Climate Assembly” (WCA) that votes for a single

worldwide price on carbon emissions via the basic democratic principle of one-person one-vote

majority rule. He finds that voting on a single internationally-binding minimum carbon price (the

proceeds from which are domestically retained) tends to counter self-interest by incentivizing

countries or agents to internalize the externality. He attempts to sketch out the sense in which each

WCA-agent's extra cost from a higher emissions price is counter-balanced by that agent's extra

benefit from inducing all other WCA-agents to simultaneously lower their emissions in response

to the higher price. He argues that the WCA-voted price and the social cost of carbon are unlikely

to differ sharply.

Datta and Somanathan (2016) examine climate policy and innovation when the government

cannot commit to the level of a policy instrument before R&D occurs. In particular, they compare

the effects of price and quantity instruments (an emissions tax and a quota with tradable permits)

on the incentive to innovate to reduce the cost of an emission-free technology. They assume that

the government cannot commit to the level of a policy instrument before R&D occurs but sets the

level to be socially optimal after the results of R&D are realized.

Kolstad and Ulph (2011) consider the formation of International Environmental

Agreements (IEAs) under uncertainty about environmental damage with different models of

learning (complete learning, partial learning, or no learning). According to Kolstad and Ulph

(2011), the results of the existing literature are generally pessimistic: the possibility of either

complete or partial learning generally reduces the level of global welfare that can be achieved from

forming an IEA relative to no learning. That literature regards uncertainty as a parameter common

to all countries, so that countries are identical ex ante as well as ex post. Kolstad and Ulph (2011)

extend the literature to the case where there is no correlation between damage costs across

countries; each country is uncertain about a particular parameter (in our case the benefit-cost ratio)

drawn from a common distribution but, ex post, each country’s realized parameter value is

independently drawn. Consequently, while countries remain identical ex ante, they may be

heterogeneous ex post. They show that this change reinforces the negative conclusions about the

effects of partial learning on international environmental agreements, but, under certain conditions,

moderates the negative conclusions about the effects of complete learning.

Karp and Zhao (2009) provide a unified discussion of the issues that confront negotiators

of the next international climate agreement. Karp and Zhao (2009) offer a novel proposal that

entitles countries to discharge their treaty obligations by paying a “fine”. This escape clause

provides cost insurance, simplifies the problem of enforcing compliance, and increases incentives

to participate in the agreement. They also explain why developed country obligations should rely

on a cap and trade commitment rather than carbon taxes. A Central Bank maintains stability of

carbon prices by defending a price ceiling and floor. A so-called intensity target is not a good

alternative to an emissions cap. Modest trade restrictions, consistent with WTO law, will form an

important part of the next agreement. Developed and developing countries have differentiated

responsibilities. Developing countries do not adopt binding targets at the next round of

negotiations, but they accept the principle of binding targets in the subsequent agreement,

beginning in the early 2020s. Developed country participation relies on a reformed CDM and

sectoral agreements that are financed by the sale of emissions permits.

Chander (forthcoming) models climate change as a dynamic game and proves the existence

of a unique subgame-perfect Nash equilibrium (SPNE) that is also Markov perfect. He interprets

this unique SPNE as the business-as-usual (BAU) equilibrium and shows that if the countries are

not sufficiently symmetric then the familiar trigger strategy equilibria may not be Pareto

improvements over the BAU equilibrium and may even lack efficiency properties. He then

introduces a subgame-perfect cooperative agreement as an improvement over the BAU

equilibrium in the sense that every country or coalition of countries is better off in every subgame,

irrespective of the extent of heterogeneity of the countries. Chander (forthcoming) characterizes

subgame-perfect cooperative agreements and identify sufficient conditions for their existence. He

also shows that (direct or indirect) transfers between countries to balance the costs and benefits of

controlling climate change are a necessity and not a matter of approach.

3.2. Dynamic structural econometric models

A second strand of literature upon which we build is that on dynamic structural

econometric models.

Our paper builds on the literature on dynamic structural econometric modeling. Rust's

(1987, 1988) seminal papers develop a dynamic structural econometric model using nested fixed

point maximum likelihood estimation. This model has been adapted for many applications,

including bus engine replacement (Rust, 1987), nuclear power plant shutdown (Rothwell and Rust,

1997), water management (Timmins, 2002), insecticide treated nets (Mahajan and Tarozzi, 2011),

agriculture (Scott, 2013), air conditioner purchases (Rapson, 2014), wind turbine shutdowns and

upgrades (Cook and Lin Lawell, 2017), copper mining decisions (Aguirregabiria and Luengo,

2016), crop disease control (Carroll et al., 2017c), supply chain externalities (Carroll et al., 2017b),

and agricultural productivity (Carroll et al., 2017a).

Structural econometric models of dynamic games include a model developed by Pakes,

Ostrovsky and Berry (2007), which has been applied to the multi-stage investment timing game in

offshore petroleum production (Lin, 2013), to ethanol investment decisions (Thome and Lin

Lawell, 2017), and to the decision to wear and use glasses (Ma, Lin Lawell and Rozelle, 2017);

and a model developed by Bajari et al. (2015) and applied to ethanol investment (Yi and Lin Lawell

2017a; Yi and Lin Lawell, 2017b). Structural econometric models of dynamic games have also

been applied to fisheries (Huang and Smith, 2014) and dynamic natural monopoly regulation (Lim

and Yurukoglu, forthcoming).

The structural econometric model of a dynamic game we use builds on a model developed

by Bajari, Benkard and Levin (2007), which has been applied to the cement industry (Ryan, 2012;

Fowlie, Reguant and Ryan, 2016), to the production decisions of ethanol producers (Yi, Lin Lawell

and Thome, 2017), to migration decisions (Rojas Valdes, Lin Lawell and Taylor, 2017a; Rojas

Valdes, Lin Lawell and Taylor, 2017b), and to the world petroleum market (Kheiravar et al., 2017).

4. Model of Dynamic Climate Policy Game

We model the dynamic game among countries making dynamic and strategic decisions

regarding energy and environmental policy in the face of technological change. The actions ia of

each country i are assumed to be functions of a set of state variables and private information:

( , )i i ia s , (1)

where s is a vector of publicly observable state variables and i is a vector of private information

shocks to country i which are not observed by either other countries or the econometrician.

State variables s include: GDP growth, GDP growth squared, GDP per capita growth, GDP

per capita growth squared, energy use per GDP, energy use, electricity consumption per capita,

electricity net consumption, petroleum consumption, coal consumption, natural gas consumption,

CO2 emissions, CO2 emissions per GDP (PPP), CO2 emissions per capita, CO2 emissions from

other sectors excluding residential buildings and commercial and public services, natural gas

production, total oil supply, wind electricity net generation, solar electricity net generation, dummy

variable for solar electricity net generation, renewable electricity output percentage, number of

residents patent applications, number of scientific and technical journal articles, population

growth, energy intensity level of primary energy, mean temperature, CO2 emissions from

manufacturing industries and construction, CO2 emissions from residential buildings and

commercial and public services, trademark applications, coal production, CO2 emissions from

electricity and heat production, CO2 intensity, energy use per capita, population, fossil fuel energy

consumption, dummy variable for wind electricity net generation, electricity net consumption,

renewable energy consumption, Shannon energy security index, nuclear electricity net generation,

renewable electricity net consumption, alternative and nuclear energy, number of non-residents

patent applications, nominal oil price, number of countries in COP meeting, global CO2

concentration, COP meeting, lagged variable for number of countries in COP meeting, lagged

variable for CO2 emissions from other sectors excluding residential buildings and commercial and

public services, lagged variable for energy intensity level of primary energy, lagged variable for

CO2 emissions from residential buildings and commercial and public services, and lagged variable

for alternative and nuclear energy.

We assume that the per-period payoff function ( )iu for each country i is given by:

( , , ) ( , ) 'i i i i i i iu a s a s , (2)

where ( , )i ia s is a vector of terms in the per-period payoff function of the same length as the

parameter vector .

Let ( )s represent the strategies of all the countries in the world, conditional only on the

publicly observable state variables s, after integrating over the private information shocks i .

The value function for each country i can be represented by:

( ; ( ), , ) max ( , ) , , ( )i

c

i i i i i i i i ia

V s s u a s V s a s ,

where the continuation value , , ( )c

i i iV s a s is the expected value of the value function next

period conditional on the state variables and strategies in the current period:

', , ( ) ( '; ( '), , ') '; , , ( )i

c

i i i i i i iV s a s E V s s dp s s a s

where s′ is the vector of next period's state variables, and where '; , , ( )i ip s s a s is the

conditional probability of state variable s′ given the current state s, country i's action ia , and the

strategies ( )i s of all other countries.

We assume that each country optimizes its behavior conditional on the current state

variables, other countries' strategies and its own private shocks, which results in a Markov perfect

equilibrium (MPE). The optimal strategy *( )i s for each country i should therefore satisfy the

following condition for all state variables s and alternative strategies ( )i s :

*( ; ( ), , , ) ( ; ( ), , , )i i i i i i i iV s s V s s .

5. Data

Since our GDP PPP data covers the years 1990-2014, and since the first COP meeting is in

1995, we construct an annual country-level panel data set for the years 1990 to 2014.

We use data from different sources of International Energy Agency (IEA) including IEA

statistics and IEA world energy balance for renewable energy consumption, fossil fuel energy

consumption, energy use, net energy imports, alternative and nuclear energy, CO2 emissions from

electricity and heat production, CO2 emissions from manufacturing industries and construction,

CO2 emissions from other sectors excluding residential buildings and commercial and public

services, CO2 emissions from residential buildings and commercial and public services,

combustible renewables and waste, electric power consumption, electricity net generation,

electricity production from coal sources, electricity production from hydroelectric sources,

electricity production from natural gas sources, electricity production from nuclear sources,

electricity production from oil sources, electricity production from oil, gas and coal sources,

energy intensity level of primary energy, energy use per capita, energy use, energy use per $1,000

GDP, GDP per unit of energy use, renewable electricity output, renewable energy consumption,

wind energy levelized cost, total primary energy consumption, total primary energy production,

total electricity net consumption, total electricity net generation, total fossil fuels electricity net

generation, total non-hydro renewable electricity net generation, wind electricity net generation,

dummy variable for wind electricity net generation, solar electricity net generation, dummy

variable for solar electricity net generation, nuclear electricity net generation, total primary coal

production, gross natural gas production, total biofuels consumption, total biofuels production,

total petroleum consumption, total oil supply, natural gas prices for industry, total coal

consumption, heavy fuel oil price for electricity generation, domestic heating oil price, automotive

diesel oil price, natural gas prices for households, natural gas price for electricity generation, fuel

ethanol consumption, biodiesel consumption, gasoline price, total renewable electricity net

consumption, total renewable electricity installed capacity, wind electricity installed capacity,

electricity prices for households, heavy fuel oil prices for electricity generation, electricity prices

for industry, gross marketed dry natural gas consumption, and R&D in renewables.

The total oil supply variable from the IEA includes the production of crude oil (including

lease condensate), natural gas plant liquids, and other liquids, and refinery processing gain. Other

Liquids includes biodiesel, ethanol, liquids produced from coal, gas, and oil shale, Orimulsion,

and other hydrocarbons. Crude Oil data for Canada include oil processed from Alberta oil sands.

Negative refinery processing gain data values indicate a net refinery processing loss. The Liquefied

Petroleum Gases category includes, where data are available, pentanes plus. The Other Products

category includes asphalt, coke, aviation gasoline, lubricants, naphthas, paraffin wax,

petrochemical feedstocks, unfinished oils, white spirits, and blending components.

We use United Nations Population Division data for population and population growth,

and United Nations Framework Convention on Climate Change information for greenhouse gas

net emissions. Moreover, we use United Nations Comtrade database for high-technology exports,

fuel export and import. We also gathered data for research and development expenditure,

researchers in R&D, scientific and technical journal articles and technicians in R&D from United

Nations Educational, Scientific, and Cultural Organization (UNESCO) institute for statistics.

We adopt CO2 emissions, CO2 emissions per GDP PPP, CO2 emissions per capita, and CO2

intensity data from Carbon Dioxide Information Analysis Center, Environmental Sciences

Division, Oak Ridge National Laboratory. Negative values of CO2 emissions from other sectors

excluding residential buildings and commercial and public services may arise because there are

some sinks (the IPCC Sink Categories) for negative emissions. We also use NOAA Earth System

Research Laboratory (ESRL) data base for the global CO2 concentration.

We extract mean, maximum, and minimum temperatures from The Global Historical

Climatology Network (GHCN) database, national centers for environmental information, National

Oceanic and Atmospheric Administration (NOAA).

We use Lazard’s levelized cost of energy analysis (version 9) for levelized cost of solar

and wind energy.

We use International Renewable Energy Agency (IRENA) databases for crystalline solar

price, onshore wind cost and wind turbine price. Photovoltaic (PV) efficiencies and cost are also

taken from the Navigant report (Navigant, 2012). We use data from a report from the National

Laboratory for Sustainable Energy (National Laboratory for Sustainable Energy, 2008) for wind

turbine size.

We use Eurostat data for final energy consumption, and InflationData website2 for global

oil prices.

Coal rents, forest rents, mineral rents, natural gas rents, oil rents and total natural resources

rents are estimated based on sources and methods described in the World Bank report “The

Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium”.

We use World Bank national accounts data, and OECD National Accounts data for GDP

per capita growth, GDP per capita growth squared, GDP per capita, GDP growth, GDP growth

squared, GDP and inflation.

We use World Intellectual Property Organization (WIPO) patent report and world

intellectual property indicators for residents and non-residents patent applications and total

trademark applications.

World Development Indicators from the World Bank is used for GDP PPP, renewable

electricity production excluding hydroelectric, total electricity production and total electricity

consumption.

Finally, we calculate the Shannon-Wienner diversity index to quantify the energy security

of each country/region (Jewell et al. 2014) as it is shown in the following formula:

ln( )i i

i

ES p p

2 http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

where pi indicates the share of fuel i.

6. Econometric estimation

We estimate the structural econometric model in two stages.

In the first stage, we use econometrics and machine learning techniques to characterize the

equilibrium policy functions for the countries' decisions regarding their environmental policies as

well as the transition functions, and apply these techniques to annual data on country-level

economic, demographic, political, and social variables and global variables such global

temperature and world oil price.

In the second stage, we apply a simulated minimum distance estimator to estimate the

structural parameters using the optimality conditions for a Markov perfect equilibrium in order

to estimate parameters that minimize profitable deviations from the optimal strategy. Using the

parameters estimates of our structural econometric model, we can simulate the effects of

counterfactual scenarios, situations, and institutions on climate change policy, emissions,

economic outcomes, and welfare.

In a Markov perfect equilibrium, each country follows optimal strategies for their climate

policy. In particular, from the definition of a Markov perfect equilibrium, we impose that the

optimal strategy *( )i s for each country i should satisfy the following condition for all state

variables s and alternative strategies ( )i s :

*( ; ( ), , , ) ( ; ( ), , , )i i i i i i i iV s s V s s ,

where are the structural parameters to be estimated.

Let ( ; ( ), )iV s s denote the expected value of the value function, which defined as:

( ; ( ), ) [ ( ; ( ), , )]i i iV s s E V s s .

Following Bajari et al. (2007), we assume the value function is linear in the unknown parameters

so that the expected value of the value function can be written as:

0

( ; ( ), ) ( ( , ), , ) ' ( ; ) 't

i i t t t it i

t

V s s E s s W s

,

where ( , , )i ia s is an M-dimensional vector of "basis functions" 1( , , )i ia s , 2 ( , , )i ia s , ...,

( , , )M

i ia s and where 1[ ]'M

i i iW W W does not depend on the unknown parameters .

Following Bajari, Benkard and Levin (2007) we calculate ( ; ( ))iW s s via forward

simulation. Based on the definition of a Markov perfect equilibrium, the optimal strategy *( )i s

for each player i should satisfy the following condition for all state variables s and alternative

strategies ( )i s :

*( ; ( ), ) ' ( ; ( ), ) 'Inc Inc

i i i i i iW s s W s s .

To estimate the unknown parameters above, we can construct a criterion condition:

*( ; ) [ ( ; , ) ( ; , )]'Inc Inc

i i i i i ig W s W s .

Then we search for incumbent parameters Inc such that profitable deviations from the optimal

actions are minimized:

2

1

1min ( ) min ( ; ),0

k

Inc

nInc Inc

n ik

kk

Q gn

,

where kn is the number of random draws k of state variables s and alternative strategies ( )i s .

In practice, to construct alternative strategies ( )i s , we add a noise term to the optimal

policy function *( )i s .

These steps are repeated until each firm reaches a terminal state with known payoff such

as the scrap value from exiting the market, or repeated T periods such that T becomes

insignificantly small relative to the simulation error generated by averaging over only a finite

number of paths (Bajari, Benkard and Levin, 2007).

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Table 1. Kyoto targets adopted during COP 3

Country/region Kyoto target, 2008-2012

(% change in emissions relative to 1990 level)

North America -

Canada -6

USA -7

Europe

European Union -8

Austria -8

Belgium -8

Denmark -8

Finland -8

France -8

Germany -8

Greece -8

Iceland 10

Ireland -8

Italy -8

Luxembourg -8

Netherlands -8

Norway 1

Portugal -8

Spain -8

Sweden -8

Switzerland -8

United Kingdom -8

Asia and Oceania -

Australia 8

Japan -6

New Zealand 0

Economies in Transition -

Bulgaria -8

Croatia -5

Czech Republic -8

Estonia -8

Hungary -6

Latvia -8

Lithuania -8

Poland -6

Romania -8

Russia 0

Slovakia -8

Slovenia -8

Ukraine 0

Source: Olivier et al. (2011).

Table 2. Kyoto targets adopted during COP 18

Country/region

Kyoto target, 2013-2020

(% change in emissions relative to 1990 level)

North America -

Canada* -

USA -

Europe

European Union -20

Austria -20

Belgium -20

Denmark -20

Finland -20

France -20

Germany -20

Greece -20

Iceland -20

Ireland -20

Italy -20

Luxembourg -20

Netherlands -20

Norway -16

Portugal -20

Spain -20

Sweden -20

Switzerland -15.8

United Kingdom -20

Asia and Oceania -

Australia -0.5

Japan** -

New Zealand -

Economies in Transition -

Belarus -12

Bulgaria -20

Croatia -20

Czech Republic -20

Cyprus -20

Estonia -20

Hungary -20

Kazakhstan -5

Latvia -20

Liechtenstein -16

Lithuania -20

Malta -20

Monaco -20

Poland -20

Romania -20

Russia** 0

Slovakia -20

Slovenia -20

Ukraine -24

*In December 2011, Canada withdrew from the Kyoto Protocol.

**In December 2010 ,Japan and Russia indicated that they do not have any intention to be under

obligation of the second commitment period of the Kyoto Protocol after 2012

Source: Doha Climate Gateway (2012).

Table 3. Summary statistics

Variable # Obs Mean Std. Dev. Min Max

Action variables

Join COP (dummy) 5,350 0.11 0.31 0 1

Adopt COP target (dummy) 5,350 0.12 0.32 0 1

COP target (%) 237 -7.86 11.74 -28 27

Country-level CO2 emissions variables

CO2 emissions (1000 kt) 4,220 149.76 624.99 0.00 9019.52

CO2 emissions per GDP (kg per 2011 PPP $ of GDP) 3,891 0.29 0.25 0.00 2.23

CO2 emissions per capita (metric tons per capita) 4,217 4.71 6.62 0.00 68.70

CO2 intensity (kg per kg of oil equivalent energy use) 3,073 2.24 2.24 0.086 77.59

Country-level CO2 emissions by sector variables

CO2 emissions from manufacturing industries and

construction (% of total CO2 emissions) 3,141

19.19 10.21 0.0 67.57

CO2 emissions from residential buildings and commercial and

public services (% of total CO2 emissions) 3,141

10.02 7.57 0.0 44.37

CO2 emissions from electricity and heat production (% of

total CO2 emissions) 3,141

37.06 19.03 0.0 85.60

CO2 emissions from other sectors excluding residential

buildings and commercial and public services (% of total CO2

emissions)

3,141

4.76 9.15 -2.38 87.22

Country-level GDP variables

GDP, PPP (billion 2011$) 4,566 457.09 1700.78 0.021 17,674.85

GDP growth (%) 4766 3.65 6.81 -64.05 149.97

GDP per capita growth (%) 3,796 2.19 6.42 -40.75 92.36

Country-level energy use variables

Energy use (billion kg of oil equivalent) 3,325 84.16 278.73 0.01 2,894.28

Energy use per GDP (kg of oil equivalent per $1000 GDP) 3,145 167.4 129.69 4.99 1197.45

Energy use per capita (kg of oil equivalent) 3,325 2356.69 2772.58 9.72 22762.08

Energy intensity level of primary energy (MJ/$2011 PPP

GDP) 4,300

8.10 9.38 0.48 127.45

Country-level fossil fuel consumption variables

Fossil fuel energy consumption (% of total) 3,254 65.11 30.97 0.00 100.00

Total petroleum consumption (Thousand barrel per day) 4,094 22.73 80.53 0.10 1017.22

Total coal consumption (Quadrillion Btu) 2,145 1.16 5.44 0.00 78.00

Natural gas consumption (billion cubic meter) 2,145 28.20 79.71 0.10 737.00

Country-level electricity consumption variables

Electric power consumption per capita (kWh per capita) 3,300 3762.98 4997.75 13.46 54799.17

Total electricity net consumption (billion kWh) 3,944 80.70 333.43 0.10 4468.00

Country-level renewable energy consumption variables

renewable energy consumption (% of total final energy

consumption) 4,134

35.30 32.38 0.00 100.0

renewable electricity net consumption (kWh) 2,856 18.08 57.84 0.00 524.46

alternative and nuclear energy (% of total energy use) 3,161 8.82 13.27 0.0 99.43

Country-level fossil fuel production variables

Natural gas production (billion cubic meter) 1,720 42.13 106.63 0.10 836.00

Total oil supply (Thousand barrel per day) 2,837 672.25 1672.31 -24.0 13973.00

Coal production (quadrillion Btu) 1,442 1.81 6.51 0.00 75.09

Country-level renewable energy production variables

Wind electricity net generation (billion kWh) 4,922 0.52 4.58 0.00 141.00

Wind electricity net generation Dummy (binary) 4,922 0.01 0.30 0.00 1.00

Solar electricity net generation (billion kWh) 4,922 0.05 0.69 0.00 26.00

Solar electricity net generation Dummy (binary) 4,922 0.03 0.16 0.00 1.00

Nuclear electricity net generation (billion kWh) 693 80.32 149.27 0.10 807.00

Renewable electricity output (% of total electricity output) 4,319 31.55 34.12 0.00 100.00

Country-level R&D variables

Patent applications by residents (#) 2,218 10746.70 47715.63 1.00 704936.00

scientific and technical journal articles (#) 4,135 4422.92 22071.29 0.00 255770.80

trademark applications (#) 2,914 24935.00 84267.21 1.00 1848858.00

non-residents patent applications (#) 2,325 5381.49 19955.85 1.00 283781.00

Other country-level variables

population (million people) 5,289 31.88 123.07 0.009 1364.27

population growth (%) 5,281 1.49 1.56 -10.96 17.62

Shannon Index (energy security index) 4,254 0.03 11.96 -657.47 1.70

Mean temperature (Celsius) 3,166 12.79 12.60 -26.41 30.14

Global state variables

Oil price (2011$) 25 42.28 28.02 11.91 91.48

# of COP countries 25 150.64 75.97 0 192

Global CO2 concentration (PPM) 25 373.55 13.37 353.97 397.11

COP meeting (dummy) 25 0.80 0.41 0 1

Notes: The total oil supply variable from the IEA includes the production of crude oil (including lease condensate), natural gas plant

liquids, and other liquids, and refinery processing gain. Negative refinery processing gain data values indicate a net refinery processing

loss, and may lead to a negative value for total oil supply. CO2 emissions from other sectors excluding residential buildings and

commercial and public services may be negative since they include the IPCC Sink Categories.

Table 4. Join COP policy function

Dependent variable is the probability of joining COP

(1) (2) (3) (4) (5)

GDP, PPP (2011$) -6.212e-13 2.478e-14*** 2.497e-14*** 1.816e-14* -1.963e-12**

(1.201e-12) (5.854e-15) (5.896e-15) (8.451e-15) (5.109e-13)

GDP growth (%) 9.480e-03 1.900e-03* 1.432e-03 5.697e-03*** 7.226e-03

(5.624e-03) (8.187e-04) (7.827e-04) (1.008e-03) (5.970e-03)

GDP growth squared (%) 2.001e-03*** 1.77e-05 2.51e-05 1.85e-06 2.146e-03***

(3.372e-04) (1.83e-05) (2.03e-05) (2.05e-05) (3.554e-04)

GDP per capita growth (%) 8.688e-03 3.514e-04 4.615e-04 5.384e-03*** 1.262e-02

(9.719e-03) (6.911e-04) (7.439e-04) (1.318e-03) (9.292e-03)

GDP per capita growth squared (%) 3.067e-04 4.12e-05*** 4.63e-05*** 3.83e-05 3.722e-04

(3.273e-04) (1.11e-05) (1.14e-05) (2.07e-05) (3.157e-04)

energy use per capita (kg of oil equivalent per capita) 5.334e-04 3.691e-04

(4.568e-04) (4.953e-04)

energy use per GDP (kg of oil equivalent per $1,000 GDP) 4.544e-02* 4.776e-02

(1.735e-02) (2.353e-02)

energy use (kg of oil equivalent) -1.677e-02

(1.460e-02)

renewable energy consumption (% of total final energy

consumption) 8.312e-03 4.894e-03

(3.686e-02) (2.152e-02)

alternative and nuclear energy (% of total energy use) 6.335e-03 -5.484e-03

(3.713e-02) (2.872e-02)

fossil fuel energy consumption (% of total energy use) -8.917e-03 1.322e-02

(3.583e-02) (3.269e-02)

electric power consumption per capita (kWh per capita) -3.845e-04 -2.660e-04*

(1.733e-04) (1.011e-04)

total electricity net consumption (billion kWh) 9.893e-03 9.348e-03***

(6.157e-03) (1.427e-03)

total petroleum consumption (thousand barrel per day) 3.004e-03 4.022e-03**

(2.195e-03) (9.251e-04)

total coal consumption (quadrillion Btu) 4.438e-01 3.276e-01

(6.487e-01) (3.387e-01)

total renewable electricity net consumption (kWh) -6.36e-05 -9.922e-04

(4.885e-03) (1.063e-03)

gross marketed dry natural gas consumption (billion cubic

meter) 8.396e-03 -6.566e-03**

(1.057e-02) (1.956e-03)

CO2 emissions (kt) 1.97e-06 -6.00e-07

(6.50e-06) (9.12e-07)

CO2 emissions per GDP (kg per 2011 PPP $ of GDP) -3.028e+00 6.513e-01

(4.915e+00) (1.335e+00)

CO2 emissions per capita (metric tons per capita) -7.553e-03 -7.373e-02

(1.713e-01) (1.973e-01)

CO2 emissions from electricity and heat production (% of

total fuel combustion) 3.577e-02 4.208e-02

(3.940e-02) (2.221e-02)

CO2 emissions from manufacturing industries and

construction (% of total fuel combustion) 1.125e-02 2.853e-02

(4.201e-02) (2.408e-02)

CO2 emissions from other sectors, excluding residential

buildings and commercial and public services (% of total fuel

combustion)

1.089e-01* 7.903e-02*

(4.656e-02) (3.411e-02)

CO2 emissions from residential buildings and commercial and

public services (% of total fuel combustion) 1.676e-02 2.088e-02

(2.828e-02) (2.483e-02)

CO2 intensity (kg per kg of oil equivalent energy use) 6.102e-01 -5.776e-02

(5.661e-01) (8.166e-01)

total primary coal production (quadrillion Btu) -3.053e-02 1.578e-02

(1.067e-01) (4.392e-02)

gross natural gas production (billion cubic meter) -6.767e-03 -2.462e-03

(7.121e-03) (2.445e-03)

total oil supply (thousand barrel per day) 1.411e-04 -2.74e-05

(3.751e-04) (1.401e-04)

wind electricity net generation (billion kWh) 2.332e-01 -3.926e-01

(7.931e-01) (2.995e-01)

dummy for wind electricity net generation (binary) 6.230e-02 3.504e-02** 4.631e-02*** 9.449e-02* 4.889e-02

(4.742e-02) (1.282e-02) (1.332e-02) (3.708e-02) (1.064e-01)

solar electricity net generation (billion kWh) -3.605e+00 -2.460e+00

(3.694e+00) (1.260e+00)

dummy for solar electricity net generation (binary) -9.828e+00

-2.207e-

01*** -2.344e-01*** -2.151e-01** -1.300e+01

(5.274e+00) (5.407e-02) (5.539e-02) (7.644e-02) (6.299e+00)

nuclear electricity net generation (billion kWh) 3.242e-03 4.833e-04

(7.419e-03) (1.547e-03)

Renewable electricity output (% of total electricity output) 1.128e-02 8.649e-03

(5.227e-03) (9.329e-03)

nonresidents patent applications (#) 1.48e-05 1.35e-05

(1.36e-05) (1.05e-05)

residents patent applications (#) -3.63e-05

(1.96e-05)

scientific and technical journal articles (#) 4.89e-06 2.73e-05**

(1.19e-05) (6.56e-06)

trademark applications (#) -6.97e-07 2.72e-06

(2.37e-06) (2.81e-06)

population growth (%) 1.167e-01 2.055e-01*

(1.271e-01) (6.767e-02)

population (persons) -3.40e-09

(1.71e-08)

energy intensity level of primary energy (MJ/$2011 PPP

GDP) -1.016e+00 -1.323e+00*

(5.183e-01) (5.872e-01)

oil price (2011$) -1.968e-02

-6.733e-

03*** -2.667e-02

(1.074e-02) (1.085e-03) (1.261e-02)

Shannon index (energy security index) -3.062e-01 -5.150e-01

(2.090e-01) (2.718e-01)

global CO2 (PPM) -8.460e-02* -7.700e-02

(3.455e-02) (4.651e-02)

mean temperature (Celsius) -2.166e-03 -2.100e-03

(7.788e-03) (3.197e-03)

# COP countries lagged 1.275e-02*** -1.058e-03 -1.716e-03 1.845e-03 1.404e-02***

(1.838e-03) (1.006e-03) (1.035e-03) (1.213e-03) (1.980e-03)

COP meeting (binary) 1.198e+00*** 6.961e-01*** 7.305e-01*** 1.159e+00***

(1.067e-01) (3.850e-02) (3.450e-02) (1.335e-01)

Constant 2.840e+01* 1.734e-01*** -1.295e-02*** 1.119e-01*** 2.637e+01

(1.213e+01) (3.037e-02) (2.808e-03) (7.837e-03) (1.455e+01)

p-value (Pr > F) . . . . .

R-squared 1.000 0.625 0.606 0.0930 0.999

Root MSE 0.0252 0.229 0.234 0.355 0.0283

Standard errors clustered by country in parentheses

*** p<0.001, ** p<0.01, * p<0.05

Table 5. Adopt COP target policy function (conditional on COP country and COP meeting)

Dependent variable is probability of adopting a COP target

(1) (2)

Probit OLS

GDP, PPP (2011$) -1.131e-13 -1.298e-14

(2.907e-13) (1.041e-14)

GDP growth (%) -5.779e-02** -4.004e-03**

(1.973e-02) (1.367e-03)

GDP growth squared (%) -4.644e-03 2.44e-05

(2.465e-03) (1.56e-05)

GDP per capita growth (%) 1.485e-02 -1.455e-04

(2.912e-02) (1.572e-03)

GDP per capita growth squared (%) -2.994e-03 -7.30e-05

(3.012e-03) (6.23e-05)

total petroleum consumption (thousand barrel per day) -3.995e-03 -1.128e-04

(5.242e-03) (1.246e-04)

total coal consumption (quadrillion Btu) -2.049e-02 1.370e-04

(9.300e-02) (1.032e-03)

CO2 emissions from manufacturing industries and construction (% of total fuel combustion) 1.566e-02* 1.195e-03*

(7.203e-03) (4.680e-04)

dummy for wind electricity net generation (binary) 2.032e-01 8.424e-03

(1.863e-01) (1.296e-02)

dummy for solar electricity net generation (binary) 1.640e+00*** 1.936e-01***

(2.954e-01) (5.444e-02)

population growth (%) -2.942e-01** -1.248e-02*

(1.049e-01) (5.348e-03)

energy intensity level of primary energy (MJ/$2011 PPP GDP) -2.346e-02 -1.165e-03

(2.186e-02) (9.370e-04)

oil price (2011$) 3.580e-02*** 2.333e-03***

(3.889e-03) (3.540e-04)

global CO2 (PPM) -1.291e-01*** -7.746e-03***

(1.689e-02) (1.165e-03)

mean temperature (Celsius) -3.533e-02*** -1.800e-03***

(8.583e-03) (4.913e-04)

# COP countries 1.758e-03***

(2.800e-04)

Constant 4.555e+01*** 2.540e+00***

(6.209e+00) (3.778e-01)

p-value (Pr > F for linear; Pr > chi2 for probit) . .

R-squared (OLS model) or pseudo R2 (probit model) 0.272 0.0903

Root MSE 0.202

# observations 1,058 1,187

Notes: Standard errors clustered by country in parentheses.

Significance codes: *** p<0.001, ** p<0.01, * p<0.05

Table 6. COP target policy function (conditional on adopt COP target)

Dependent variable is the level of the COP target adopted

(1) (2) (3) (4)

GDP, PPP (2011$) -5.315e-12 -6.187e-12 -2.085e-11 -2.754e-11

(3.847e-12) (4.469e-12) (1.457e-11) (2.759e-11)

GDP growth (%) 7.876e-01** 9.069e-01* 1.175e+00 5.100e+00***

(2.591e-01) (3.306e-01) (8.722e-01) (1.262e+00)

GDP growth squared (%) -1.176e-01 -1.245e-01 -1.975e-01 -6.690e-01**

(6.193e-02) (6.729e-02) (1.336e-01) (2.176e-01)

GDP per capita growth (%) -6.071e-02 -1.053e-01 -6.541e-03 -2.406e+00*

(3.082e-01) (3.264e-01) (5.848e-01) (1.000e+00)

GDP per capita growth squared (%) -7.450e-02 -7.700e-02 -1.756e-01 -5.954e-01**

(4.881e-02) (5.326e-02) (1.207e-01) (1.894e-01)

total petroleum consumption (thousand barrel per day) 5.256e-02 7.834e-02 2.602e-01 -1.101e-01

(7.552e-02) (8.589e-02) (1.986e-01) (2.562e-01)

total coal consumption (quadrillion Btu) 1.897e+00 1.113e+00 3.258e+00 -1.970e+01*

(1.954e+00) (1.878e+00) (2.827e+00) (7.532e+00)

CO2 emissions from manufacturing industries and construction (% of

total fuel combustion) -1.493e-01 -1.448e-01 -3.078e-01 2.202e-01

(3.082e-01) (2.986e-01) (4.999e-01) (6.990e-01)

wind electricity net generation (billion kWh) 1.211e+00

(5.853e+00)

dummy for wind electricity net generation (binary) 3.757e-01 4.160e-01 3.267e-01 -9.503e+00

(4.542e+00) (4.516e+00) (8.123e+00) (9.299e+00)

population growth (%) - -

energy intensity level of primary energy (MJ/$2011 PPP GDP) 2.756e-01 1.701e+00 2.915e+00 3.830e+00

(2.021e+00) (1.507e+00) (5.231e+00) (7.917e+00)

mean temperature (Celsius) 3.408e-01 2.184e+00 1.626e+01* 3.051e+01

(3.048e-01) (4.863e+00) (7.910e+00) (2.153e+01)

Energy use (kg of oil equivalent per capita) 7.361e-01* 7.100e-01* 5.558e-01 -1.816e+00

(3.062e-01) (2.990e-01) (5.407e-01) (1.125e+00)

Energy use (kg of oil equivalent per $1,000 GDP) -7.030e-04 1.948e-03 -1.019e-02

(7.035e-04) (1.806e-03) (1.530e-02)

CO2 emissions (metric tons per capita) -6.652e-02 -6.646e-01 -1.187e+00

(2.004e-01) (3.291e-01) (8.763e-01)

CO2 emissions from other sectors, excluding residential buildings and

commercial and public services (% of total fuel combustion) -2.430e+00*** -9.899e-01

(6.526e-01) (5.492e+00)

CO2 emissions from residential buildings and commercial and public

services (% of total fuel combustion) -4.529e-01

(4.576e+00)

CO2 intensity (kg per kg of oil equivalent energy use) -1.359e+00*

(5.193e-01)

Total Oil Supply (Thousand barrel per day) 2.084e+01

(1.419e+01)

Renewable electricity output (% of total electricity output) 4.353e-03

(3.597e-03)

scientific and technical journal articles (#) 1.125e-01

(9.878e-02)

trademark applications (#) 2.114e-03

(1.272e-03)

Shannon index (energy security index) 7.722e-04**

(2.588e-04)

dummy for solar electricity net generation (binary) 5.085e-02

(4.802e-02)

oil price (2011$) 2.301e-01 -4.484e-01

(1.812e+00) (1.874e+00)

Constant -2.916e-01** -2.634e-01**

(8.300e-02) (8.967e-02)

p-value (Pr > F) (8.717e+00) (8.829e+00) (1.395e+01) (4.712e+01)

R-squared 0.610 0.618 0.543 0.984

Root MSE 8.545 8.677 10.89 6.717

# observations 55 55 30 26

Notes: Standard errors clustered by country in parentheses.

Significance codes: *** p<0.001, ** p<0.01, * p<0.05

Table 7. Transition densities for the global state variables

Dependent variable is:

Oil Price (2011$) # of COP countries Global CO2 (PPM) COP meeting (dummy)

lagged oil price (2011$) 1.893e-01 -7.155e-01 -1.518e-02 -5.857e-03

(2.223e-01) (5.201e-01) (9.054e-03) (4.186e-03)

lagged global CO2 (PPM) 1.890e+00** 1.835e+00 1.046e+00*** 1.512e-02

(5.713e-01) (1.336e+00) (2.327e-02) (1.076e-02)

# COP countries lagged -1.914e-01 -3.847e-02 -1.377e-03 -1.781e-03

(1.812e-01) (4.239e-01) (7.380e-03) (3.411e-03)

lagged COP meeting (dummy) 1.706e+01 1.532e+02* 3.587e-01 9.696e-01

(3.120e+01) (7.298e+01) (1.270e+00) (5.873e-01)

Constant -6.498e+02** -6.102e+02 -1.456e+01 -5.042e+00

(1.974e+02) (4.618e+02) (8.039e+00) (3.716e+00)

p-value (Pr > F) 32.22 56.86 6318 21.48

R-squared 0.866 0.919 0.999 0.811

Root MSE 10.32 24.15 0.420 0.194


Notes: Standard errors in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

Table 8. Transition densities for CO2 emissions variables


CO2 emissions

(kt)

CO2 emissions

(kg per 2011 PPP

$ of GDP)

CO2 emissions

(metric tons per

capita)

CO2 intensity (kg

per kg of oil

equivalent energy

use)

lagged GDP, PPP (2011$) -8.91e-07 2.169e-13 -4.482e-12 1.219e-13

(4.82e-07) (2.222e-13) (6.828e-12) (8.178e-13)

lagged GDP growth (%) 1.115e+03 -2.442e-03 3.343e-02 -4.311e-03

(2.494e+03) (1.442e-03) (6.204e-02) (6.824e-03)

lagged GDP growth squared (%) 3.737e+02 4.976e-04** 8.569e-04 -4.500e-04

(2.441e+02) (1.468e-04) (3.652e-03) (5.843e-04)

lagged GDP per capita growth (%) -4.259e+02 5.999e-04 -5.356e-02 -8.874e-04

(1.445e+03) (1.215e-03) (3.648e-02) (3.332e-03)

lagged GDP per capita growth squared (%) -6.823e+01 -1.021e-04 -1.230e-03 -5.307e-04*

(1.059e+02) (7.30e-05) (1.894e-03) (1.901e-04)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -6.465e+03 8.894e-04 -2.478e-01 -2.856e-02*

(7.459e+03) (3.309e-03) (1.664e-01) (1.132e-02)

lagged energy use (kg of oil equivalent) -2.745e+02 -4.40e-05 -4.621e-02 -1.263e-02

(1.955e+03) (1.176e-03) (4.395e-02) (7.203e-03)

lagged electric power consumption (kWh per capita) 2.535e+01 -1.16e-05 -4.728e-04 -9.34e-05*

(2.207e+01) (1.23e-05) (4.294e-04) (4.09e-05)

lagged total electricity net consumption (billion kWh) 1.670e+03 -1.066e-04 3.986e-02 7.535e-03

(1.098e+03) (5.541e-04) (2.565e-02) (3.818e-03)

lagged total petroleum consumption (thousand barrel per day) 2.576e+03 -7.371e-04 4.073e-02 3.820e-03

(7.747e+03) (1.687e-03) (1.003e-01) (7.880e-03)

lagged total coal consumption (quadrillion Btu) -8.658e+04 1.091e-01 4.654e+00 5.343e-01***

(6.412e+04) (6.422e-02) (3.292e+00) (1.117e-01)

lagged gross marketed dry natural gas consumption (billion cubic meter) -1.005e+03 1.779e-03* 1.653e-02 1.502e-03

(1.183e+03) (8.205e-04) (4.014e-02) (2.766e-03)

lagged CO2 emissions (kt) 3.170e+00* -1.37e-06 -2.78e-05 -3.14e-06

(1.181e+00) (1.00e-06) (3.91e-05) (2.49e-06)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 3.705e+04 1.028e+00*** -1.294e+01 5.709e+00*

(6.499e+05) (2.461e-01) (1.281e+01) (2.011e+00)

lagged CO2 emissions (metric tons per capita) -4.275e+04 8.822e-03 7.007e-01 2.005e-02

(3.108e+04) (1.473e-02) (4.080e-01) (3.814e-02)

lagged CO2 emissions from other sectors, excluding residential


combustion)

-6.953e+03 1.423e-03 -2.810e-01 1.278e-02

(1.492e+04) (4.106e-03) (2.666e-01) (2.188e-02)

lagged gross natural gas production (billion cubic meter) -3.025e+03* -6.381e-04* -2.272e-02 2.75e-05

(1.075e+03) (2.569e-04) (2.328e-02) (1.844e-03)

lagged total oil supply (thousand barrel per day) 4.332e+01 1.042e-04 4.053e-03 3.881e-04**

(6.963e+01) (5.51e-05) (2.967e-03) (1.118e-04)

lagged dummy for wind electricity net generation (binary) 1.702e+04 4.044e-02* 3.337e-01 4.048e-02

(1.892e+04) (1.536e-02) (4.011e-01) (6.357e-02)

lagged solar electricity net generation (billion kWh) 3.593e+04 -3.608e-03 -5.437e-02 -3.476e-03

(2.870e+04) (1.787e-02) (6.135e-01) (3.586e-02)

lagged dummy for solar electricity net generation (binary) -1.667e+04 7.398e-03 5.443e-01 1.035e-01

(1.735e+04) (1.697e-02) (7.158e-01) (8.107e-02)

lagged Renewable electricity output (% of total electricity output) -1.651e+03 3.601e-04 3.830e-02 3.384e-03

(1.235e+03) (8.177e-04) (3.667e-02) (2.042e-03)

lagged residents patent applications (#) -3.305e+00 8.67e-07 -2.86e-05 -4.30e-06

(2.023e+00) (8.60e-07) (3.25e-05) (2.87e-06)

lagged scientific and technical journal articles (#) 2.118e+01 -5.71e-07 5.003e-04 2.64e-05

(1.693e+01) (5.95e-06) (3.869e-04) (4.43e-05)

lagged population growth (%) -2.346e+03 1.768e-02 2.124e-01 3.163e-03

(2.766e+04) (1.910e-02) (4.327e-01) (7.961e-02)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 1.184e+05 -1.947e-02 7.072e+00 4.372e-01

(1.527e+05) (8.265e-02) (4.483e+00) (3.092e-01)

lagged oil price (2011$) -4.357e+02 -1.85e-05 -1.221e-02 7.601e-04

(5.339e+02) (3.921e-04) (7.349e-03) (1.336e-03)

lagged mean temperature (Celsius) -1.838e+03 2.05e-05 -2.468e-03 1.240e-03

(5.987e+03) (2.360e-03) (1.122e-01) (2.025e-02)

lagged CO2 emissions from manufacturing industries and construction

(% of total CO2 emissions) 4.393e+03 4.211e-03* 1.136e-02 1.308e-02

(3.795e+03) (1.927e-03) (9.206e-02) (1.034e-02)

lagged global CO2 (PPM) 1.066e+03 -8.890e-04 -1.744e-01 -2.448e-03

(6.659e+03) (3.856e-03) (1.385e-01) (1.729e-02)

lagged CO2 emissions from residential buildings and commercial and

public services (% of total fuel combustion) -3.100e+03 8.276e-04 3.660e-02 1.970e-03

(4.066e+03) (1.679e-03) (7.796e-02) (1.093e-02)

lagged trademark applications (#) -2.865e+00 -2.19e-07 -1.005e-04 -1.18e-05*

(2.011e+00) (1.44e-06) (7.00e-05) (4.85e-06)

lagged Kyoto target 3.919e+01 4.643e-04 3.824e-03 -5.834e-03

(5.343e+03) (1.608e-03) (1.007e-01) (1.618e-02)

Constant -5.338e+04 1.981e-01 6.864e+01 2.718e+00

(2.657e+06) (1.568e+00) (5.519e+01) (7.137e+00)

p-value (Pr > F) . . . .

R-squared 0.999 0.998 0.994 0.996

Root MSE 26257 0.0141 0.452 0.0495


Notes: Standard errors clustered by country in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

Table 9. Transition densities for CO2 emissions by sector variables


CO2 emissions

from

manufacturing

industries and

construction (%

of total CO2

emissions)

CO2

emissions

from

residential

buildings

and

commercial

and public

services (%

of total

CO2

emissions)

CO2

emissions

from

electricity and

heat

production (%

of total CO2

emissions)

CO2

emissions

from other

sectors

excluding

residential

buildings and

commercial

and public

services (%

of total CO2

emissions)

lagged GDP, PPP (2011$) 7.969e-12 2.309e-12 6.639e-13 -2.108e-12*

(5.076e-12) (7.222e-12) (8.661e-12) (7.438e-13)

lagged GDP growth (%) -5.289e-02 -9.759e-02 -6.395e-02 1.880e-02

(7.823e-02) (1.073e-01) (1.729e-01) (1.253e-02)

lagged GDP growth squared (%) -6.430e-03 -3.662e-03 -2.044e-02 1.231e-03

(6.945e-03) (1.040e-02) (2.242e-02) (1.291e-03)

lagged GDP per capita growth (%) 4.719e-02 8.567e-02 -6.451e-02 5.980e-03

(5.254e-02) (5.677e-02) (9.377e-02) (1.584e-02)

lagged GDP per capita growth squared (%) -3.298e-03 -3.395e-03 -1.057e-03 1.54e-05

(2.829e-03) (2.688e-03) (4.835e-03) (1.069e-03)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -7.305e-03 2.888e-02 -4.493e-01 -4.602e-02

(1.480e-01) (2.007e-01) (2.335e-01) (2.263e-02)

lagged energy use (kg of oil equivalent) -4.408e-02 2.807e-02 -2.296e-01 -3.791e-03

(2.939e-02) (4.308e-02) (1.121e-01) (7.089e-03)

lagged electric power consumption (kWh per capita) -8.815e-04** 4.160e-04 -8.293e-04 1.427e-04

(2.592e-04) (3.149e-04) (9.750e-04) (8.08e-05)

lagged total electricity net consumption (billion kWh) 2.862e-03 -1.829e-02 1.010e-01 -1.252e-03

(1.560e-02) (2.561e-02) (5.570e-02) (2.683e-03)

lagged total petroleum consumption (thousand barrel per day) -2.990e-02 -1.144e-02 1.218e-01 5.794e-03

(7.579e-02) (7.358e-02) (1.631e-01) (1.356e-02)

lagged total coal consumption (quadrillion Btu) 8.292e-01 -6.384e-02 7.588e+00* -5.332e-02

(1.589e+00) (1.135e+00) (3.577e+00) (2.535e-01)

lagged gross marketed dry natural gas consumption (billion cubic meter) -7.493e-02* 2.399e-02 -7.959e-02 4.223e-03

(2.945e-02) (4.751e-02) (8.756e-02) (3.381e-03)

lagged CO2 emissions (kt) -2.53e-06 -5.57e-06 -2.50e-05 6.44e-06

(2.16e-05) (1.43e-05) (2.33e-05) (3.14e-06)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) -3.172e+01** 1.306e+01 2.742e+01 2.541e+00

(9.206e+00) (1.111e+01) (2.993e+01) (2.055e+00)

lagged CO2 emissions (metric tons per capita)

4.829e-01 -2.203e-01 2.135e-01

-3.562e-

01***

(4.286e-01) (5.264e-01) (5.266e-01) (7.866e-02)

lagged CO2 emissions from other sectors, excluding residential buildings

and commercial and public services (% of total fuel combustion) -1.598e-01 9.011e-02

-

2.100e+00*** 8.890e-01***

(2.327e-01) (3.197e-01) (4.644e-01) (4.503e-02)

lagged gross natural gas production (billion cubic meter) 7.700e-02*** -2.068e-03 9.877e-02 -7.898e-03

(1.530e-02) (3.643e-02) (8.246e-02) (5.827e-03)

lagged total oil supply (thousand barrel per day) -1.369e-03 -3.750e-04 3.702e-03 1.756e-04

(7.636e-04) (9.438e-04) (2.219e-03) (1.793e-04)

lagged dummy for wind electricity net generation (binary) -1.378e+00 3.728e-01 2.527e+00* -1.941e-02

(9.258e-01) (1.072e+00) (1.066e+00) (1.242e-01)

lagged solar electricity net generation (billion kWh) -3.877e-02 9.031e-02 -2.031e-01 2.067e-02

(6.153e-02) (6.870e-02) (1.995e-01) (1.639e-02)

lagged dummy for solar electricity net generation (binary) 4.824e-01 -7.535e-01 -6.246e-01 1.540e-01

(8.415e-01) (8.356e-01) (1.145e+00) (1.487e-01)

lagged Renewable electricity output (% of total electricity output) 6.520e-02** -5.451e-02* -1.822e-01** -6.122e-03

(1.687e-02) (2.442e-02) (5.203e-02) (4.319e-03)

lagged residents patent applications (#) 1.59e-05 8.73e-06 -1.007e-04 -2.55e-06

(2.24e-05) (3.43e-05) (6.27e-05) (3.20e-06)

lagged scientific and technical journal articles (#) 1.27e-05 -9.20e-05 6.107e-04 3.84e-05

(1.899e-04) (2.529e-04) (4.814e-04) (3.28e-05)

lagged population growth (%) 1.631e+00 -4.560e-01 -4.682e+00 5.870e-01***

(8.646e-01) (1.017e+00) (2.508e+00) (1.259e-01)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 2.774e+00 -1.633e+00 1.090e+01 8.892e-01

(3.625e+00) (5.079e+00) (7.067e+00) (5.823e-01)

lagged oil price (2011$) -1.587e-02 6.115e-03 -2.349e-02 -1.671e-03

(9.654e-03) (1.197e-02) (2.622e-02) (2.967e-03)

lagged mean temperature (Celsius) -7.478e-02 1.227e-01 -5.020e-02 -1.126e-02

(7.256e-02) (1.080e-01) (2.666e-01) (1.217e-02)

lagged CO2 emissions from manufacturing industries and construction (% of

total CO2 emissions) 6.956e-01*** 1.558e-01 -9.802e-02 -9.012e-03

(1.069e-01) (1.347e-01) (2.087e-01) (1.012e-02)

lagged global CO2 (PPM) 1.326e-01 -1.040e-01 4.944e-02 -6.530e-04

(9.089e-02) (1.296e-01) (3.068e-01) (2.250e-02)

lagged CO2 emissions from residential buildings and commercial and public

services (% of total fuel combustion) 1.167e-02

9.616e-

01***

-9.292e-

01*** -2.257e-02

(6.367e-02) (6.296e-02) (1.758e-01) (1.401e-02)

lagged trademark applications (#) -2.29e-05 -3.56e-07 -1.331e-04 2.08e-05*

(3.38e-05) (2.96e-05) (1.309e-04) (7.17e-06)

lagged Kyoto target 8.047e-02 -6.777e-02 -3.787e-01 -2.232e-02

(7.804e-02) (1.212e-01) (2.537e-01) (1.082e-02)

Constant -4.868e+01 3.884e+01 3.960e+01 2.899e+00

(3.621e+01) (5.148e+01) (1.252e+02) (8.963e+00)

p-value (Pr > F) . . . .

R-squared 0.981 0.987 0.990 0.993

Root MSE 0.912 1.075 1.841 0.198



Table 10. Transition densities for GDP variables


GDP, PPP

(2011$)

GDP

growth (%)

GDP

growth

squared(%)

GDP per

capita

growth (%)

GDP per

capita

growth

squared(%)

lagged GDP, PPP (2011$) 8.464e-03 -2.485e-11 -4.887e-11 -7.369e-12 -6.35e-11

(5.181e-01) (1.767e-11) (1.48e-10) (1.670e-11) (2.14e-10)

lagged GDP growth (%) 5.896e+09 2.055e-01 -2.381e+00 -2.044e-01 2.267e+00

(4.225e+09) (2.107e-01) (2.097e+00) (3.015e-01) (3.254e+00)

lagged GDP growth squared (%) 7.673e+08 1.855e-02 -1.582e-01 1.000e-02 4.977e-01

(4.687e+08) (1.739e-02) (1.448e-01) (3.541e-02) (5.244e-01)

lagged GDP per capita growth (%) -8.146e+08 -1.937e-01 5.183e-01 -5.034e-02 3.813e-02

(1.729e+09) (1.272e-01) (8.517e-01) (2.525e-01) (2.222e+00)

lagged GDP per capita growth squared (%) 1.531e+07 6.256e-04 3.199e-02 -1.499e-02 -4.322e-01**

(2.160e+08) (8.855e-03) (4.514e-02) (1.824e-02) (1.418e-01)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -8.360e+09 -5.750e-02 3.964e+00 6.064e-01 1.071e+01

(1.130e+10) (4.503e-01) (3.927e+00) (5.737e-01) (6.684e+00)

lagged energy use (kg of oil equivalent) 5.137e+09 -7.092e-02 2.749e+00 -4.794e-02 -1.173e+00

(3.394e+09) (1.344e-01) (1.606e+00) (1.127e-01) (1.303e+00)

lagged electric power consumption (kWh per capita) 7.822e+07 -5.142e-04 2.624e-02 -1.944e-03 -2.315e-02

(3.899e+07) (1.269e-03) (1.367e-02) (9.793e-04) (1.471e-02)

lagged total electricity net consumption (billion kWh) -2.269e+08 5.882e-02 -1.280e+00 2.502e-02 -2.475e-02

(1.022e+09) (5.999e-02) (7.289e-01) (5.864e-02) (5.082e-01)

lagged total petroleum consumption (thousand barrel per day) -2.629e+09 -4.985e-02 -4.478e+00 1.655e-02 3.393e+00

(1.398e+10) (3.557e-01) (2.544e+00) (2.166e-01) (2.561e+00)

lagged total coal consumption (quadrillion Btu) -2.726e+11 -3.119e+00 -6.883e+01 -2.623e-02 1.213e+01

(1.714e+11) (5.128e+00) (4.874e+01) (4.325e+00) (4.074e+01)

lagged gross marketed dry natural gas consumption (billion cubic

meter) -7.440e+08 -2.803e-01 2.438e+00 2.229e-02 6.540e-01

(2.904e+09) (1.596e-01) (1.467e+00) (7.866e-02) (1.105e+00)

lagged CO2 emissions (kt) 3.232e+06 1.289e-04* 4.232e-04 8.43e-06 -2.543e-04

(1.754e+06) (4.86e-05) (4.444e-04) (4.67e-05) (5.053e-04)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 2.212e+12* -6.654e+01 5.398e+02 -3.563e+01 -2.149e+02

(1.014e+12) (3.420e+01) (2.792e+02) (3.838e+01) (5.027e+02)

lagged CO2 emissions (metric tons per capita) -7.256e+10 -1.183e+00 -1.110e+00 2.293e+00 1.872e+01

(3.982e+10) (1.089e+00) (8.972e+00) (1.332e+00) (2.081e+01)



combustion)

-1.462e+10 -8.181e-01 7.518e+00* 1.130e+00 1.185e+01

(1.234e+10) (4.390e-01) (3.360e+00) (7.409e-01) (1.141e+01)

lagged gross natural gas production (billion cubic meter) -4.663e+09 -1.723e-03 -1.798e+00 3.469e-03 -2.707e-02

(2.350e+09) (9.874e-02) (1.062e+00) (8.508e-02) (1.205e+00)

lagged total oil supply (thousand barrel per day) -3.216e+07 -3.314e-04 -3.538e-02 -2.515e-03 1.591e-02

(1.300e+08) (3.329e-03) (2.809e-02) (4.128e-03) (3.880e-02)

lagged dummy for wind electricity net generation (binary) 4.204e+10 7.925e-01 -2.215e+01 1.072e+00 2.888e+01

(2.923e+10) (1.565e+00) (1.669e+01) (2.885e+00) (2.854e+01)

lagged solar electricity net generation (billion kWh) 3.232e+09 -7.061e-02 2.392e-01 5.455e-01 6.213e+00

(7.196e+09) (2.465e-01) (1.558e+00) (3.356e-01) (4.755e+00)

lagged dummy for solar electricity net generation (binary) -1.018e+10 6.645e-01 -1.849e+01 8.796e-01 1.516e+01

(3.214e+10) (1.425e+00) (1.482e+01) (2.419e+00) (2.979e+01)

lagged Renewable electricity output (% of total electricity output) -4.022e+09 5.043e-02 -1.394e+00 1.137e-01 5.660e-01

(2.212e+09) (7.459e-02) (7.074e-01) (8.319e-02) (8.931e-01)

lagged residents patent applications (#) -1.643e+06 -1.337e-04 1.482e-03 -8.30e-06 1.109e-04

(2.107e+06) (8.15e-05) (7.854e-04) (6.62e-05) (6.126e-04)

lagged scientific and technical journal articles (#) 8.059e+06 1.127e-03 -5.561e-04 2.25e-05 1.786e-03

(1.933e+07) (6.383e-04) (5.749e-03) (6.044e-04) (6.345e-03)

lagged population growth (%) -3.934e+09 3.013e+00 -3.290e+01 8.900e-01 6.269e+01

(5.511e+10) (1.918e+00) (1.618e+01) (3.482e+00) (6.395e+01)

lagged energy intensity level of primary energy (MJ/$2011 PPP

GDP) 1.003e+10 4.788e+00 -1.513e+02 -1.343e+01 -2.494e+02

(2.649e+11) (1.206e+01) (1.142e+02) (1.456e+01) (1.533e+02)

lagged oil price (2011$) -2.618e+09* -9.255e-02* 2.671e-01 -1.224e-02 2.464e-01

(1.115e+09) (3.542e-02) (1.785e-01) (8.169e-02) (9.587e-01)

lagged mean temperature (Celsius) 6.336e+09 -3.060e-01 -7.977e-01 -7.700e-01 -1.065e+01

(5.305e+09) (1.868e-01) (1.832e+00) (5.302e-01) (8.063e+00)

lagged CO2 emissions from manufacturing industries and

construction (% of total CO2 emissions) 9.307e+09 -1.694e-01 1.958e+00 -3.123e-01 -7.334e-01

(5.942e+09) (1.990e-01) (1.642e+00) (4.142e-01) (5.315e+00)

lagged global CO2 (PPM) 1.452e+10 5.141e-01 -8.898e-01 -9.591e-02 -7.400e+00

(7.368e+09) (2.790e-01) (2.401e+00) (4.421e-01) (4.765e+00)


public services (% of total fuel combustion) 1.375e+09 -1.907e-01 -1.082e+00 -1.819e-01 -3.524e+00

(3.956e+09) (1.403e-01) (1.554e+00) (2.864e-01) (3.659e+00)

lagged trademark applications (#) 1.293e+06 -1.312e-04 1.909e-03* 1.334e-04 1.033e-03

(3.043e+06) (1.140e-04) (8.865e-04) (1.219e-04) (1.632e-03)

lagged Kyoto target -6.454e+09 1.637e-01 1.588e+00 5.597e-01 7.595e+00

(5.129e+09) (1.438e-01) (1.991e+00) (4.721e-01) (6.739e+00)

Constant -5.139e+12 -1.756e+02 3.834e+02 4.770e+01 2.995e+03

(2.793e+12) (1.093e+02) (9.446e+02) (1.820e+02) (2.026e+03)

p-value (Pr > F) . . . . .

R-squared 0.999 0.858 0.820 0.672 0.621

Root MSE 5.260e+10 2.088 18.16 3.671 41.30

# observations 64 64 64 64 64


Table 11. Transition densities for energy use variables


Energy use (kg

of oil

equivalent)

Energy use

per GDP(kg

of oil

equivalent

per $1000

GDP)

energy use per

capita (kg of

oil equivalent)

Energy

intensity

level of

primary

energy

(MJ/$2011

PPP GDP)

lagged GDP, PPP (2011$) -1.58e-10 -1.958e-12 -2.00e-09 -7.053e-14

(9.06e-11) (2.769e-11) (1.51e-09) (1.215e-12)

lagged GDP growth (%) 3.211e-01 -1.239e+00* -1.560e+00 -5.107e-02*

(6.999e-01) (4.704e-01) (1.848e+01) (1.952e-02)

lagged GDP growth squared (%) 1.836e-01* 1.763e-01* 1.342e+00 7.411e-03*

(7.719e-02) (6.990e-02) (1.441e+00) (2.915e-03)

lagged GDP per capita growth (%) -2.701e-02 1.243e-01 -2.032e+01 3.351e-03

(2.454e-01) (3.310e-01) (1.585e+01) (1.365e-02)

lagged GDP per capita growth squared (%) -4.692e-03 -3.971e-03 5.580e-01 -1.066e-04

(2.313e-02) (2.431e-02) (1.131e+00) (1.031e-03)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -7.011e-01 1.068e+00 -1.865e+01 1.057e-02

(1.922e+00) (1.200e+00) (6.780e+01) (5.442e-02)

lagged energy use (kg of oil equivalent) 1.829e+00** 2.577e-01 1.396e+01 1.125e-02

(4.595e-01) (2.964e-01) (9.026e+00) (1.262e-02)

lagged electric power consumption (kWh per capita) 9.993e-03 2.370e-03 1.837e-01** 1.021e-04

(5.524e-03) (2.337e-03) (4.992e-02) (9.76e-05)

lagged total electricity net consumption (billion kWh) -3.165e-01 -1.475e-01 -2.907e+00 -6.318e-03

(1.718e-01) (1.170e-01) (4.681e+00) (4.980e-03)

lagged total petroleum consumption (thousand barrel per day) -1.158e-01 9.690e-02 -5.523e+00 4.441e-03

(2.030e+00) (5.371e-01) (1.907e+01) (2.393e-02)

lagged total coal consumption (quadrillion Btu) -4.018e+01 4.743e+00 -2.318e+02 1.636e-01

(2.828e+01) (8.604e+00) (4.681e+02) (3.729e-01)

lagged gross marketed dry natural gas consumption (billion cubic meter) -1.744e-01 4.674e-01 -6.318e+00 1.957e-02

(5.707e-01) (2.385e-01) (5.595e+00) (9.673e-03)

lagged CO2 emissions (kt) 5.208e-04 -7.80e-05 6.577e-03 -3.29e-06

(3.032e-04) (8.50e-05) (4.591e-03) (3.37e-06)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 2.403e+02 5.698e+01 -9.022e+03*** 2.990e+00

(1.159e+02) (6.109e+01) (2.068e+03) (2.687e+00)

lagged CO2 emissions (metric tons per capita) -1.085e+01 -6.843e-01 1.792e+02 -2.532e-02

(6.321e+00) (2.800e+00) (1.607e+02) (1.246e-01)


and commercial and public services (% of total fuel combustion) -2.084e+00 9.492e-01 -4.574e+01 4.490e-02

(2.016e+00) (1.511e+00) (8.343e+01) (6.584e-02)

lagged gross natural gas production (billion cubic meter) -1.041e+00* -2.340e-01 -1.250e+01* -9.646e-03

(4.792e-01) (1.824e-01) (5.302e+00) (7.697e-03)

lagged total oil supply (thousand barrel per day) 2.549e-02 2.595e-03 1.742e-01 8.96e-05

(1.981e-02) (7.770e-03) (4.037e-01) (3.399e-04)

lagged dummy for wind electricity net generation (binary) 1.105e+01 7.422e+00 9.623e+01 3.469e-01*

(5.850e+00) (3.822e+00) (1.394e+02) (1.552e-01)

lagged solar electricity net generation (billion kWh) 7.728e-01 4.883e-01 1.524e+01 2.232e-02

(9.776e-01) (5.165e-01) (1.935e+01) (2.130e-02)

lagged dummy for solar electricity net generation (binary) -5.130e+00 -1.405e+00 -2.162e+00 -4.277e-02

(5.073e+00) (2.501e+00) (1.219e+02) (1.045e-01)

lagged Renewable electricity output (% of total electricity output) -5.761e-01 -1.976e-01 -2.024e+00 -8.803e-03

(3.091e-01) (1.571e-01) (3.674e+00) (6.488e-03)

lagged residents patent applications (#) -1.044e-04 9.56e-05 -5.713e-03 4.05e-06

(3.428e-04) (1.466e-04) (7.449e-03) (6.56e-06)

lagged scientific and technical journal articles (#) 4.135e-03 -1.047e-03 3.496e-02 -4.92e-05

(3.085e-03) (1.050e-03) (4.318e-02) (4.61e-05)

lagged population growth (%) 1.563e+00 2.895e+00 1.080e+02 1.180e-01

(8.028e+00) (3.993e+00) (2.270e+02) (1.718e-01)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) -6.256e+00 -9.289e+00 8.093e+02 3.892e-01

(4.509e+01) (3.116e+01) (1.655e+03) (1.400e+00)

lagged oil price (2011$) -2.612e-01 6.484e-02 -3.361e+00 2.045e-03

(1.237e-01) (1.089e-01) (1.876e+00) (4.824e-03)

lagged mean temperature (Celsius) -1.117e-01 -1.847e-04 -7.413e+00 -8.528e-04

(7.537e-01) (4.799e-01) (2.037e+01) (2.060e-02)


total CO2 emissions) 1.661e+00* 8.215e-01 3.793e+00 3.764e-02

(7.470e-01) (4.742e-01) (2.115e+01) (1.995e-02)

lagged global CO2 (PPM) 2.054e+00* 2.653e-01 1.102e+01 8.826e-03

(8.138e-01) (6.085e-01) (2.357e+01) (2.463e-02)


services (% of total fuel combustion) -4.577e-01 -1.455e-01 -5.768e+00 -5.174e-03

(6.713e-01) (3.549e-01) (1.783e+01) (1.486e-02)

lagged trademark applications (#) 1.449e-04 2.558e-04 9.768e-04 1.19e-05

(3.897e-04) (2.305e-04) (8.856e-03) (1.05e-05)

lagged Kyoto target 1.530e-01 1.209e-01 1.263e+00 3.000e-03

(7.568e-01) (4.869e-01) (2.195e+01) (2.074e-02)

Constant -7.169e+02* -1.099e+02 -2.679e+03 -3.762e+00

(2.895e+02) (2.412e+02) (9.749e+03) (9.752e+00)

p-value (Pr > F) . . . .

R-squared 0.999 0.996 0.985 0.996

Root MSE 8.429 5.527 218.6 0.232



Table 12. Transition densities for fossil fuel consumption variables


Fossil fuel

energy

consumption

(% of total)

Total

Petroleum

Consumption

(Thousand

barrel per

day)

Total Coal

Consumption

(Quadrillion

Btu)

Natural Gas

Consumption

(billion cubic

meter)

lagged GDP, PPP (2011$) 8.978e-12 -4.828e-11 -2.911e-12 -6.01e-11

(1.089e-11) (3.634e-11) (1.674e-12) (3.400e-11)

lagged GDP growth (%) -7.700e-02 1.569e-01 1.202e-03 5.559e-01

(1.892e-01) (2.780e-01) (1.251e-02) (3.866e-01)

lagged GDP growth squared (%) -4.759e-03 3.833e-02 1.309e-03 6.200e-02

(1.830e-02) (2.863e-02) (1.852e-03) (4.555e-02)

lagged GDP per capita growth (%) 1.941e-01 3.034e-02 8.729e-03 1.502e-01

(1.458e-01) (1.208e-01) (7.129e-03) (2.763e-01)

lagged GDP per capita growth squared (%) -1.711e-02 -1.703e-03 -3.559e-04 -1.119e-02

(1.114e-02) (1.200e-02) (7.908e-04) (2.316e-02)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -1.022e+00* -2.347e-01 2.075e-02 -1.656e+00

(4.491e-01) (8.100e-01) (3.920e-02) (1.089e+00)

lagged energy use (kg of oil equivalent) -4.215e-01*** 1.261e-01 2.161e-02 -6.220e-02

(9.762e-02) (1.318e-01) (1.607e-02) (2.066e-01)

lagged electric power consumption (kWh per capita) -4.079e-04 3.751e-03 2.745e-04 2.947e-03

(8.922e-04) (1.934e-03) (1.535e-04) (2.694e-03)

lagged total electricity net consumption (billion kWh) 1.058e-01* 1.333e-01 -8.257e-03 4.387e-02

(3.806e-02) (8.042e-02) (4.686e-03) (9.838e-02)

lagged total petroleum consumption (thousand barrel per day) 4.925e-01** 6.549e-01 -1.974e-02 1.343e+00

(1.570e-01) (7.133e-01) (5.704e-02) (6.839e-01)

lagged total coal consumption (quadrillion Btu) 4.878e+00 -1.430e+01 -7.938e-01 -1.582e+01

(3.843e+00) (8.975e+00) (8.029e-01) (9.226e+00)

5.244e-02 9.176e-02 -2.007e-02* 1.294e-02

lagged gross marketed dry natural gas consumption (billion cubic

meter) (7.867e-02) (2.446e-01) (7.325e-03) (1.791e-01)

lagged CO2 emissions (kt) -1.36e-05 1.641e-04 1.92e-05* 2.755e-04*

(6.56e-05) (9.36e-05) (8.26e-06) (1.198e-04)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 2.341e+02*** 1.030e+02* 7.347e+00 1.226e+02

(4.002e+01) (4.798e+01) (4.123e+00) (8.988e+01)

lagged CO2 emissions (metric tons per capita) -4.196e-01 -2.837e+00 -1.892e-01 -6.643e+00*

(1.175e+00) (2.431e+00) (1.240e-01) (3.108e+00)



combustion)

3.872e-01 -3.250e-01 2.979e-03 -3.800e+00*

(8.224e-01) (6.127e-01) (4.623e-02) (1.599e+00)

lagged gross natural gas production (billion cubic meter) 1.184e-01* -2.607e-01 -1.952e-02* -5.217e-01

(4.748e-02) (1.550e-01) (6.745e-03) (3.013e-01)

lagged total oil supply (thousand barrel per day) 4.333e-03* -4.138e-03 1.437e-04 4.119e-02*

(1.925e-03) (6.346e-03) (5.905e-04) (1.472e-02)

lagged dummy for wind electricity net generation (binary) 2.724e+00 1.752e+00 2.953e-01 1.566e+00

(2.411e+00) (2.116e+00) (1.916e-01) (2.893e+00)

lagged solar electricity net generation (billion kWh) -6.607e-02 4.556e-03 3.250e-02 5.834e-01

(1.802e-01) (4.574e-01) (2.491e-02) (5.004e-01)

lagged dummy for solar electricity net generation (binary) 3.475e-01 -1.776e+00 -1.395e-01 -7.066e-01

(1.748e+00) (2.290e+00) (1.643e-01) (2.838e+00)

lagged Renewable electricity output (% of total electricity output) -1.933e-02 -2.447e-01* -1.773e-02 -8.509e-02

(4.534e-02) (1.147e-01) (9.344e-03) (1.411e-01)

lagged residents patent applications (#) -1.007e-04* -1.292e-04 -2.49e-06 -5.296e-04**

(3.50e-05) (1.339e-04) (8.52e-06) (1.721e-04)

lagged scientific and technical journal articles (#) -8.712e-04 -3.075e-04 3.74e-05 -4.502e-04

(5.866e-04) (7.834e-04) (9.13e-05) (1.057e-03)

lagged population growth (%) -1.496e+00 -3.336e-01 -1.983e-01 2.601e+00

(1.607e+00) (3.167e+00) (2.671e-01) (3.030e+00)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 1.436e+01 -4.608e+00 -1.108e+00 3.592e+01

(9.974e+00) (1.859e+01) (1.064e+00) (2.462e+01)

lagged oil price (2011$) -1.019e-01 -1.177e-01* -8.231e-03 -2.197e-01*

(4.883e-02) (4.849e-02) (4.281e-03) (9.299e-02)

lagged mean temperature (Celsius) 9.381e-01* 2.953e-01 1.904e-02 1.468e+00

(3.983e-01) (2.812e-01) (3.203e-02) (7.918e-01)

lagged CO2 emissions from manufacturing industries and construction

(% of total CO2 emissions) 8.089e-01* 4.972e-01 5.897e-02 5.052e-01

(2.990e-01) (3.582e-01) (3.402e-02) (4.712e-01)

lagged global CO2 (PPM) 2.471e-01 7.385e-01 5.746e-02 1.441e+00

(2.645e-01) (3.739e-01) (3.549e-02) (7.037e-01)


public services (% of total fuel combustion) 1.040e+00*** -6.672e-02 -7.992e-04 7.973e-01

(2.162e-01) (1.942e-01) (1.835e-02) (5.008e-01)

lagged trademark applications (#) 1.286e-04 6.37e-05 5.97e-06 -1.247e-04

(1.388e-04) (1.240e-04) (1.15e-05) (3.187e-04)

lagged Kyoto target -1.100e+00** -2.798e-01 -1.657e-02 -1.457e+00

(3.254e-01) (1.885e-01) (3.197e-02) (7.645e-01)

Constant -6.172e+01 -2.589e+02 -2.153e+01 -5.540e+02

(1.084e+02) (1.432e+02) (1.401e+01) (2.693e+02)

p-value (Pr > F) . . . .

R-squared 0.984 0.999 0.990 0.999

Root MSE 2.304 3.060 0.225 5.175



Table 13. Transition densities for electricity consumption variables


Electric power

consumption per

capita (kWh per

capita)

Total Electricity Net

Consumption (billion

kWh)

lagged GDP, PPP (2011$) -1.70e-09 -9.38e-11

(2.65e-09) (7.96e-11)

lagged GDP growth (%) 8.471e+00 8.193e-01

(3.377e+01) (6.836e-01)

lagged GDP growth squared (%) 6.223e-01 1.329e-01

(1.891e+00) (7.691e-02)

lagged GDP per capita growth (%) -2.625e+01 8.468e-02

(3.384e+01) (3.073e-01)

lagged GDP per capita growth squared (%) 1.137e+00 -1.652e-02

(2.326e+00) (4.296e-02)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -3.603e+01 -3.084e-01

(1.038e+02) (2.055e+00)

lagged energy use (kg of oil equivalent) 5.927e-01 1.915e+00*

(1.281e+01) (7.306e-01)

lagged electric power consumption (kWh per capita) 9.677e-01*** 1.015e-02

(8.145e-02) (7.250e-03)

lagged total electricity net consumption (billion kWh) -3.943e-02 4.191e-01

(8.400e+00) (2.390e-01)

lagged total petroleum consumption (thousand barrel per day) -7.478e+00 -2.249e+00

(2.924e+01) (2.400e+00)

lagged total coal consumption (quadrillion Btu) -5.984e+00 -3.223e+01

(7.263e+02) (2.972e+01)

lagged gross marketed dry natural gas consumption (billion cubic meter) -5.964e+00 -5.194e-01

(5.998e+00) (3.527e-01)

lagged CO2 emissions (kt) 4.090e-03 2.331e-04

(7.187e-03) (2.857e-04)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) -8.797e+02 3.997e+02

(2.320e+03) (2.109e+02)

lagged CO2 emissions (metric tons per capita) -1.226e+02 -1.110e+01

(2.366e+02) (6.882e+00)

lagged CO2 emissions from other sectors, excluding residential buildings and

commercial and public services (% of total fuel combustion)

-5.773e+01 -6.935e+00*

(9.549e+01) (3.013e+00)

lagged gross natural gas production (billion cubic meter) 4.783e-01 -4.916e-01

(4.045e+00) (3.692e-01)

lagged total oil supply (thousand barrel per day) 3.209e-02 1.265e-02

(4.003e-01) (2.587e-02)

lagged dummy for wind electricity net generation (binary) 2.870e+01 1.065e+01

(2.144e+02) (7.236e+00)

lagged solar electricity net generation (billion kWh) 1.646e+01 -4.000e-01

(1.885e+01) (1.042e+00)

lagged dummy for solar electricity net generation (binary) -1.077e+01 9.412e-01

(1.890e+02) (7.512e+00)

lagged Renewable electricity output (% of total electricity output) 4.841e+00 -4.026e-01

(7.942e+00) (4.093e-01)

lagged residents patent applications (#) -4.11e-05 5.672e-04

(9.830e-03) (3.554e-04)

lagged scientific and technical journal articles (#) 1.092e-01 7.900e-03*

(9.253e-02) (3.237e-03)

lagged population growth (%) 2.005e+02 -4.357e+00

(4.140e+02) (1.017e+01)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 8.918e+02 -2.111e+01

(2.576e+03) (5.105e+01)

lagged oil price (2011$) -7.704e+00** -5.199e-01

(2.081e+00) (2.483e-01)

lagged mean temperature (Celsius) -1.995e+01 2.035e+00

(2.130e+01) (1.454e+00)


total CO2 emissions) -8.272e+00 1.992e+00

(3.438e+01) (1.316e+00)

lagged global CO2 (PPM) 6.489e+00 1.515e+00

(2.625e+01) (1.405e+00)


services (% of total fuel combustion) -2.523e+00 2.076e-01

(1.556e+01) (6.503e-01)

lagged trademark applications (#) -1.056e-03 -1.021e-03

(5.104e-03) (6.182e-04)

lagged Kyoto target 1.528e+01 -3.619e-01

(2.013e+01) (1.244e+00)

Constant -7.014e+02 -5.115e+02

(1.130e+04) (5.421e+02)

p-value (Pr > F) . .

R-squared 0.997 0.999

Root MSE 370.1 11.38

# observations 64 64 Notes: Standard errors clustered by country in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

Table 14. Transition densities for renewable energy consumption variables


renewable energy

consumption (%

of total final

energy

consumption)

renewable

electricity

net

consumption

(kWh)

alternative and

nuclear energy

(% of total

energy use)

lagged GDP, PPP (2011$) -1.021e-11 7.03e-11 -5.157e-12

(8.380e-12) (6.49e-11) (1.995e-11)

lagged GDP growth (%) -6.398e-02 1.894e-01 1.716e-01

(1.107e-01) (8.610e-01) (2.955e-01)

lagged GDP growth squared (%) -1.017e-02 2.057e-02 1.126e-02

(1.025e-02) (1.317e-01) (2.775e-02)

lagged GDP per capita growth (%) 6.239e-02 4.485e-02 -3.412e-01

(9.507e-02) (4.004e-01) (1.617e-01)

lagged GDP per capita growth squared (%) 9.031e-04 4.322e-02 2.130e-02

(5.161e-03) (9.927e-02) (1.033e-02)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -4.557e-01 -3.041e+00 8.154e-01

(2.471e-01) (1.612e+00) (5.397e-01)

lagged energy use (kg of oil equivalent) -2.381e-03 1.759e+00 4.880e-01**

(4.003e-02) (1.428e+00) (1.350e-01)

lagged electric power consumption (kWh per capita) 2.188e-03** 1.473e-02 9.857e-04

(6.765e-04) (7.973e-03) (1.436e-03)

lagged total electricity net consumption (billion kWh) -2.270e-02 -6.668e-01 -1.097e-01*

(1.984e-02) (3.213e-01) (4.841e-02)

lagged total petroleum consumption (thousand barrel per day) -2.189e-01 -1.221e+00 -4.259e-01

(1.039e-01) (1.024e+00) (2.224e-01)

lagged total coal consumption (quadrillion Btu) 2.689e-01 -2.791e+01 -6.108e+00

(1.999e+00) (2.606e+01) (5.392e+00)

lagged gross marketed dry natural gas consumption (billion cubic meter) -5.897e-02 -3.024e-01 -5.105e-02

(3.237e-02) (6.172e-01) (9.785e-02)

lagged CO2 emissions (kt) 7.94e-05* -1.144e-04 -3.93e-06

(2.94e-05) (4.544e-04) (9.59e-05)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) -6.951e+01*** 6.692e+02 -2.116e+02***

(1.667e+01) (4.586e+02) (5.037e+01)

lagged CO2 emissions (metric tons per capita) -1.970e+00* -1.560e+01 -4.464e-01

(8.861e-01) (7.704e+00) (1.972e+00)


and commercial and public services (% of total fuel combustion)

-1.053e+00* -7.133e+00* -5.763e-01

(4.782e-01) (3.076e+00) (1.200e+00)

lagged gross natural gas production (billion cubic meter) -3.485e-02 3.933e-01 -1.262e-01

(4.802e-02) (3.894e-01) (7.587e-02)

lagged total oil supply (thousand barrel per day) -1.750e-03 -2.181e-02 -5.548e-03

(1.530e-03) (2.457e-02) (2.814e-03)

lagged dummy for wind electricity net generation (binary) -2.164e+00 -7.137e+00 -3.315e+00

(1.661e+00) (1.216e+01) (3.016e+00)

lagged solar electricity net generation (billion kWh) -5.324e-02 1.787e+00 1.727e-01

(1.509e-01) (9.742e-01) (2.278e-01)

lagged dummy for solar electricity net generation (binary) -2.848e+00* 7.907e-01 1.423e+00

(1.150e+00) (6.548e+00) (3.158e+00)

lagged Renewable electricity output (% of total electricity output) 2.084e-01*** 2.419e-01 -1.312e-01

(3.914e-02) (4.216e-01) (6.868e-02)

lagged residents patent applications (#) -5.21e-05 -9.045e-04 1.258e-04*

(2.61e-05) (1.045e-02) (5.15e-05)

lagged scientific and technical journal articles (#) 5.639e-04 1.685e-03 4.457e-04

(3.303e-04) (6.228e-03) (7.456e-04)

lagged population growth (%) -2.462e+00 6.687e+00 5.097e+00

(1.918e+00) (1.290e+01) (3.256e+00)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 1.309e+01* 3.921e+01 -1.040e+01

(5.601e+00) (3.178e+01) (1.125e+01)

lagged oil price (2011$) 7.805e-03 2.158e-02 1.166e-01

(2.350e-02) (2.366e-01) (6.733e-02)

lagged mean temperature (Celsius) -2.227e-01 2.709e-01 -1.019e+00

(1.690e-01) (1.535e+00) (5.151e-01)

lagged CO2 emissions from manufacturing industries and construction (%

of total CO2 emissions) -4.769e-01* -7.962e-02 -7.584e-01

(1.989e-01) (1.819e+00) (4.561e-01)

lagged global CO2 (PPM) -5.866e-02 4.632e-01 -3.607e-01

(1.899e-01) (1.592e+00) (3.239e-01)


public services (% of total fuel combustion) -5.809e-01** 1.612e+00 -1.317e+00***

(1.604e-01) (1.204e+00) (3.130e-01)

lagged trademark applications (#) 1.607e-04 -7.463e-04 -3.099e-04

(8.84e-05) (4.848e-04) (1.991e-04)

lagged Kyoto target -7.170e-02 -2.087e+00 1.874e+00***

(1.642e-01) (2.185e+00) (4.144e-01)

Constant 5.855e+01 -1.924e+02 2.119e+02

(7.711e+01) (6.107e+02) (1.317e+02)

p-value (Pr > F) . . .

R-squared 0.994 0.998 0.971

Root MSE 1.520 5.181 3.203

# observations 64 45 64 Notes: Standard errors clustered by country in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

Table 15. Transition densities for fossil fuel production variables


Natural Gas

Production

(billion cubic

meter)

Total Oil

Supply

(Thousand

barrel per

day)

coal

production

(quadrillion

Btu)

lagged GDP, PPP (2011$) -1.71e-10 -5.07e-11 -1.196e-12

(8.27e-11) (1.71e-10) (1.061e-12)

lagged GDP growth (%) 9.472e-01 -2.538e-01 2.696e-02

(7.468e-01) (1.478e+00) (2.112e-02)

lagged GDP growth squared (%) 1.378e-01 1.200e-01 2.004e-03

(9.956e-02) (2.200e-01) (2.581e-03)

lagged GDP per capita growth (%) -3.080e-01 3.512e-01 -3.058e-03

(4.308e-01) (1.462e+00) (9.544e-03)

lagged GDP per capita growth squared (%) 1.541e-02 5.518e-02 1.401e-03

(1.837e-02) (9.944e-02) (7.572e-04)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) -1.311e+00 4.572e+00 -2.536e-02

(2.703e+00) (3.746e+00) (5.583e-02)

lagged energy use (kg of oil equivalent) 5.859e-01 2.132e+00 1.697e-02

(4.552e-01) (1.064e+00) (1.934e-02)

lagged electric power consumption (kWh per capita) 9.094e-03* -4.229e-03 -3.416e-04*

(3.693e-03) (9.916e-03) (1.251e-04)

lagged total electricity net consumption (billion kWh) -6.248e-02 -3.464e-01 2.807e-03

(1.287e-01) (2.811e-01) (5.806e-03)

lagged total petroleum consumption (thousand barrel per day) 1.605e+00 -4.640e+00 3.771e-02

(1.190e+00) (3.452e+00) (3.509e-02)

lagged total coal consumption (quadrillion Btu) -4.133e+00 -9.499e+01 8.037e-01

(1.703e+01) (5.814e+01) (5.596e-01)

lagged gross marketed dry natural gas consumption (billion cubic meter) 7.106e-01 -1.262e+00 -2.029e-03

(6.037e-01) (1.230e+00) (1.224e-02)

lagged CO2 emissions (kt) 7.07e-05 8.401e-04 -1.07e-05

(1.444e-04) (5.886e-04) (8.88e-06)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 2.500e+02* -1.328e+02 1.226e+01

(9.799e+01) (2.231e+02) (1.148e+01)

lagged CO2 emissions (metric tons per capita) -1.247e+01* 3.396e+00 1.299e-01

(5.640e+00) (1.240e+01) (1.333e-01)


and commercial and public services (% of total fuel combustion)

-5.498e+00** -7.495e+00 -3.451e-01

(1.650e+00) (4.610e+00) (1.695e-01)

lagged gross natural gas production (billion cubic meter) -9.633e-01 -9.173e-01 -6.117e-03

(6.677e-01) (6.719e-01) (9.006e-03)

lagged total oil supply (thousand barrel per day)

7.574e-02*

9.974e-

01*** 1.271e-03

(3.167e-02) (4.484e-02) (7.290e-04)

lagged dummy for wind electricity net generation (binary) -1.843e+00 1.456e+00 -2.140e-01

(5.736e+00) (1.904e+01) (1.903e-01)

lagged solar electricity net generation (billion kWh) 1.092e+00 -2.165e-01 -1.550e-03

(8.062e-01) (1.883e+00) (2.106e-02)

lagged dummy for solar electricity net generation (binary) -9.424e+00 -3.039e-01 -1.399e-01

(5.344e+00) (1.251e+01) (2.059e-01)

lagged Renewable electricity output (% of total electricity output) -3.304e-01 2.955e-01 1.192e-02

(1.987e-01) (5.737e-01) (1.724e-02)

lagged residents patent applications (#) -3.879e-04 6.063e-04 -3.081e-04

(2.976e-04) (5.605e-04) (1.882e-04)

lagged scientific and technical journal articles (#) 3.061e-03 2.934e-03 1.047e-04

(2.459e-03) (4.471e-03) (1.830e-04)

lagged population growth (%) 9.629e+00 1.233e+01 5.622e-01

(8.358e+00) (2.409e+01) (4.120e-01)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) 1.031e+01 -1.167e+02 -2.925e-01

(6.596e+01) (9.364e+01) (1.021e+00)

lagged oil price (2011$) -1.484e-02 4.894e-01 2.368e-03

(1.220e-01) (3.692e-01) (5.617e-03)

lagged mean temperature (Celsius) -1.433e+00 -9.293e-01 -5.565e-02

(1.675e+00) (2.075e+00) (5.191e-02)


total CO2 emissions) -8.746e-01 -1.662e+00 -2.622e-04

(1.657e+00) (2.638e+00) (5.243e-02)

lagged global CO2 (PPM) 1.667e+00 1.364e-01 4.403e-02

(8.722e-01) (1.712e+00) (2.370e-02)


services (% of total fuel combustion) -1.614e+00 -2.174e+00 -1.324e-02

(1.587e+00) (1.941e+00) (3.606e-02)

lagged trademark applications (#) -2.085e-04 -1.148e-03 -1.91e-05

(6.671e-04) (6.740e-04) (2.27e-05)

lagged Kyoto target

1.778e+00 3.923e+00

4.370e-

01**

(2.060e+00) (2.032e+00) (1.196e-01)

Constant -4.962e+02 7.952e+01 -1.114e+01

(3.255e+02) (6.661e+02) (1.039e+01)

p-value (Pr > F) . . .

R-squared 0.999 1.000 0.999

Root MSE 8.583 22.06 0.164

# observations 62 64 50 Notes: Standard errors clustered by country in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

Table 16. Transition densities for renewable energy production variables


Wind

Electricity Net

Generation

(billion kWh)

Wind

Electricity Net

Generation

Dummy

(binary)

Solar

Electricity

Net

Generation

(billion kWh)

Solar

Electricity

Net

Generation

Dummy

(binary)

nuclear

electricity net

generation

(billion kWh)

Renewable

electricity

output (% of

total electricity

output)

lagged GDP, PPP (2011$) 3.489e-13 3.489e-13 4.092e-12 -1.001e-12 -1.19e-09 -1.550e-11

(9.758e-13) (9.758e-13) (3.710e-12) (2.138e-12) (0.000e+00) (2.555e-11)

lagged GDP growth (%) -7.183e-03 -7.183e-03 1.183e-01 2.582e-03 -2.919e+00 5.935e-03

(2.213e-02) (2.213e-02) (9.740e-02) (2.073e-02) (0.000e+00) (2.947e-01)

lagged GDP growth squared (%) -4.331e-03 -4.331e-03 7.795e-03 6.28e-05 1.579e-01 1.820e-02

(2.557e-03) (2.557e-03) (8.396e-03) (2.191e-03) (0.000e+00) (2.735e-02)

lagged GDP per capita growth (%) -4.871e-04 -4.871e-04 1.528e-02 1.581e-02 -1.848e+00 -1.125e-01

(1.288e-02) (1.288e-02) (4.807e-02) (1.102e-02) (0.000e+00) (1.491e-01)

lagged GDP per capita growth squared

(%) -1.781e-04 -1.781e-04 -3.024e-03 -1.156e-03 -5.038e-01 1.003e-02

(8.308e-04) (8.308e-04) (3.646e-03) (1.044e-03) (0.000e+00) (9.865e-03)

lagged energy use per GDP (kg of oil

equivalent per $1,000 GDP) -5.426e-02 -5.426e-02 -3.814e-02 -3.692e-03 6.825e+01 -4.327e-01

(2.675e-02) (2.675e-02) (9.290e-02) (5.153e-02) (0.000e+00) (6.583e-01)

lagged energy use (kg of oil equivalent) -1.097e-02 -1.097e-02 2.026e-02 3.012e-03 3.649e+00 2.074e-01

(9.908e-03) (9.908e-03) (2.902e-02) (1.039e-02) (0.000e+00) (2.129e-01)

lagged electric power consumption (kWh

per capita) -8.01e-05 -8.01e-05 1.054e-04 -8.72e-05 -9.188e-02 2.221e-03

(8.48e-05) (8.48e-05) (1.424e-04) (1.168e-04) (0.000e+00) (2.039e-03)

lagged total electricity net consumption

(billion kWh) 4.619e-03 4.619e-03 -1.975e-02 6.783e-03 -1.526e+00 -4.564e-02

(3.910e-03) (3.910e-03) (1.488e-02) (5.540e-03) (0.000e+00) (9.105e-02)

lagged total petroleum consumption

(thousand barrel per day) 2.738e-03 2.738e-03 -1.552e-02 3.734e-02 -3.114e+01 -1.599e-01

(1.304e-02) (1.304e-02) (4.176e-02) (3.359e-02) (0.000e+00) (3.431e-01)

lagged total coal consumption

(quadrillion Btu) 1.686e-01 1.686e-01 -2.758e-01 8.079e-01 -6.247e+01 -2.456e+00

(2.594e-01) (2.594e-01) (1.096e+00) (5.818e-01) (0.000e+00) (7.864e+00)

lagged gross marketed dry natural gas

consumption (billion cubic meter) -1.119e-02 -1.119e-02 4.347e-02 1.564e-02 -8.100e+00 1.663e-01

(9.908e-03) (9.908e-03) (3.703e-02) (1.291e-02) (0.000e+00) (1.011e-01)

lagged CO2 emissions (kt) 3.17e-08 3.17e-08 -1.59e-05 -1.29e-05 7.676e-03 2.80e-05

(3.87e-06) (3.87e-06) (1.98e-05) (7.11e-06) (0.000e+00) (7.76e-05)

lagged CO2 emissions (kg per 2011 PPP

$ of GDP) -8.811e-01 -8.811e-01 1.772e+01 -1.126e+00 -9.274e+03 1.749e+01

(2.264e+00) (2.264e+00) (1.326e+01) (2.904e+00) (0.000e+00) (3.862e+01)

lagged CO2 emissions (metric tons per

capita) -3.216e-02 -3.216e-02 -2.970e-02 4.976e-02 1.335e+02 -1.940e+00

(8.436e-02) (8.436e-02) (2.329e-01) (1.624e-01) (0.000e+00) (2.138e+00)

lagged CO2 emissions from other sectors,

excluding residential buildings and

commercial and public services (% of

total fuel combustion)

-6.432e-02 -6.432e-02 -1.565e-01 -9.794e-02 6.795e+00 -2.543e-01

(5.204e-02) (5.204e-02) (1.225e-01) (7.948e-02) (0.000e+00) (1.033e+00)

lagged gross natural gas production

(billion cubic meter) 9.146e-03 9.146e-03 -1.277e-02 -3.058e-03 -5.770e+00 -1.325e-01

(6.443e-03) (6.443e-03) (1.785e-02) (1.240e-02) (0.000e+00) (1.443e-01)

lagged total oil supply (thousand barrel

per day) -5.60e-05 -5.60e-05 7.175e-04 2.313e-04 1.331e-02 -5.307e-03

(1.531e-04) (1.531e-04) (9.709e-04) (4.901e-04) (0.000e+00) (4.689e-03)

lagged dummy for wind electricity net

generation (binary) 3.470e-01 3.470e-01 -3.283e-01 -1.247e-01 2.167e+01 -9.723e+00

(2.362e-01) (2.362e-01) (4.762e-01) (3.656e-01) (0.000e+00) (6.472e+00)

lagged solar electricity net generation

(billion kWh) -6.917e-03 -6.917e-03 1.473e+00*** -2.638e-02 -1.539e-01 2.915e-01

(1.634e-02) (1.634e-02) (3.909e-02) (2.694e-02) (0.000e+00) (3.250e-01)

lagged dummy for solar electricity net

generation (binary) 1.635e-03 1.635e-03 -3.445e-01 2.707e-01 -8.503e+01 -2.223e-01

(1.280e-01) (1.280e-01) (4.617e-01) (1.509e-01) (0.000e+00) (1.729e+00)

lagged Renewable electricity output (%

of total electricity output) 1.137e-02 1.137e-02 1.007e-02 3.187e-03 5.506e+00 9.032e-01***

(5.574e-03) (5.574e-03) (1.334e-02) (5.572e-03) (0.000e+00) (7.780e-02)

lagged residents patent applications (#) -2.89e-06 -2.89e-06 2.71e-05 -7.58e-06 -2.692e-03 3.64e-05

(3.99e-06) (3.99e-06) (3.07e-05) (7.62e-06) (0.000e+00) (1.076e-04)

lagged scientific and technical journal

articles (#) 1.06e-05 1.06e-05 4.23e-05 1.101e-04 8.862e-02 8.29e-05

(3.64e-05) (3.64e-05) (1.260e-04) (7.53e-05) (0.000e+00) (9.041e-04)

lagged population growth (%) 4.464e-02 4.464e-02 4.077e-01 1.298e-01 -1.286e+02 4.146e+00

(8.247e-02) (8.247e-02) (4.356e-01) (2.308e-01) (0.000e+00) (4.453e+00)

lagged energy intensity level of primary

energy (MJ/$2011 PPP GDP) 1.522e+00 1.522e+00 1.397e-01 2.026e-01 -1.251e+03 7.354e+00

(7.529e-01) (7.529e-01) (2.356e+00) (1.175e+00) (0.000e+00) (1.548e+01)

lagged oil price (2011$) -9.875e-04 -9.875e-04 -1.808e-02 2.673e-03 5.719e-01 6.098e-02

(2.125e-03) (2.125e-03) (1.415e-02) (4.589e-03) (0.000e+00) (4.194e-02)

lagged mean temperature (Celsius) 7.384e-03 7.384e-03 1.700e-02 -2.944e-02 -4.471e+00 -1.124e-01

(1.601e-02) (1.601e-02) (8.001e-02) (2.852e-02) (0.000e+00) (4.304e-01)

lagged CO2 emissions from

manufacturing industries and

construction (% of total CO2 emissions)

-5.341e-02 -5.341e-02 -7.098e-02 -8.055e-03 -2.133e+01 -8.319e-01

(2.552e-02) (2.552e-02) (6.766e-02) (3.779e-02) (0.000e+00) (6.152e-01)

lagged global CO2 (PPM) -1.178e-02 -1.178e-02 9.831e-02 4.304e-02 -3.730e+00 -6.052e-02

(2.017e-02) (2.017e-02) (1.127e-01) (3.214e-02) (0.000e+00) (3.582e-01)

lagged CO2 emissions from residential

buildings and commercial and public

services (% of total fuel combustion)

1.074e-02 1.074e-02 3.366e-02 -3.762e-02 -2.996e+01 -3.611e-01

(1.088e-02) (1.088e-02) (6.776e-02) (2.242e-02) (0.000e+00) (3.030e-01)

lagged trademark applications (#) 3.31e-06 3.31e-06 -6.18e-06 -4.52e-05** 1.052e-02 -2.85e-05

(7.23e-06) (7.23e-06) (1.97e-05) (1.44e-05) (0.000e+00) (1.624e-04)

lagged Kyoto target -5.600e-03 -5.600e-03 4.390e-02 3.669e-02 5.085e+00 1.511e-01

(1.728e-02) (1.728e-02) (8.343e-02) (2.852e-02) (0.000e+00) (5.022e-01)

Constant 5.340e+00 5.340e+00 -3.645e+01 -1.549e+01 2.309e+03 6.022e+01

(7.626e+00) (7.626e+00) (4.459e+01) (1.229e+01) (0.000e+00) (1.495e+02)

p-value (Pr > F) . . . . . .

R-squared 0.890 0.890 0.933 0.836 1 0.991

Root MSE 0.189 0.189 1.105 0.289 0 3.758

# observations 64 64 64 64 34 64


Table 17. Transition densities for R&D variables


Patent

applications

residents

(#)

scientific and

technical

journal

articles (#)

trademark

applications

(#)

non-

residents

patent

applications

(#)

lagged GDP, PPP (2011$)

-1.72e-08 4.53e-10 -3.80e-08*

-1.87e-

08***

(1.44e-08) (3.50e-09) (1.56e-08) (4.33e-09)

lagged GDP growth (%) 5.128e+01 -1.866e+01 -9.771e+01 -2.447e+01

(1.307e+02) (2.452e+01) (1.587e+02) (7.598e+01)

lagged GDP growth squared (%) 1.244e+01 -2.071e+00 -8.530e+00 -7.598e-01

(1.889e+01) (2.088e+00) (1.524e+01) (7.284e+00)

lagged GDP per capita growth (%) 7.370e+01 8.713e+00 9.040e+01 9.566e+01

(8.676e+01) (1.377e+01) (6.269e+01) (5.521e+01)

lagged GDP per capita growth squared (%) -1.284e+00 -1.689e-01 1.261e+00 -1.401e+00

(1.319e+01) (1.051e+00) (6.532e+00) (5.298e+00)

lagged energy use per GDP (kg of oil equivalent per $1,000 GDP) 1.569e+01 -4.078e+01 -1.002e+02 1.455e+02

(4.290e+02) (6.558e+01) (3.654e+02) (1.793e+02)

lagged energy use (kg of oil equivalent) 1.248e+02 -4.150e+01 -2.064e+02** -8.490e+01

(1.682e+02) (2.603e+01) (6.373e+01) (5.307e+01)

lagged electric power consumption (kWh per capita) 2.673e+00 1.611e-02 2.033e-01 3.124e-01

(1.576e+00) (1.190e-01) (8.338e-01) (5.075e-01)

lagged total electricity net consumption (billion kWh) 1.461e+02* 1.672e+01 1.736e+02*** 7.949e+01**

(5.442e+01) (1.594e+01) (2.569e+01) (1.986e+01)

lagged total petroleum consumption (thousand barrel per day) -5.171e+02 1.466e+02*** 3.946e+02 -1.057e+02

(5.017e+02) (2.788e+01) (3.764e+02) (1.287e+02)

lagged total coal consumption (quadrillion Btu) -

1.293e+04* 9.401e+02 -6.338e+03 -1.994e+03

(6.031e+03) (5.765e+02) (7.555e+03) (1.352e+03)

lagged gross marketed dry natural gas consumption (billion cubic meter) -9.126e+01 1.269e+01 -1.554e+02 -3.747e+01

(6.125e+01) (9.559e+00) (9.161e+01) (3.247e+01)

lagged CO2 emissions (kt) 1.163e-01* -9.274e-03 1.237e-01 6.601e-02**

(5.254e-02) (9.250e-03) (9.441e-02) (1.866e-02)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) 9.304e+04 1.685e+03 -3.293e+04 -1.308e+04

(5.291e+04) (7.539e+03) (1.957e+04) (1.985e+04)

lagged CO2 emissions (metric tons per capita) -1.353e+03 9.647e+01 -6.008e+02 4.988e+01

(1.390e+03) (1.578e+02) (8.581e+02) (5.339e+02)

lagged CO2 emissions from other sectors, excluding residential buildings and commercial

and public services (% of total fuel combustion) -4.210e+02 9.600e+01 9.603e+02 -7.677e+02*

(7.012e+02) (1.106e+02) (5.476e+02) (3.501e+02)

lagged gross natural gas production (billion cubic meter) -2.764e+01 8.812e+00 -2.137e+01 1.160e+01

(3.690e+01) (9.472e+00) (6.048e+01) (1.963e+01)

lagged total oil supply (thousand barrel per day) -1.052e+01 -3.354e-01 -2.817e+00 -1.613e+00

(5.783e+00) (5.171e-01) (4.122e+00) (1.614e+00)

lagged dummy for wind electricity net generation (binary) 1.492e+03 -3.761e+01 2.138e+03 1.385e+02

(1.296e+03) (2.688e+02) (1.978e+03) (8.680e+02)

lagged solar electricity net generation (billion kWh) -1.056e+02 2.826e+02 -5.989e+01 -7.237e+01

(2.319e+02) (1.848e+02) (1.800e+02) (7.554e+01)

lagged dummy for solar electricity net generation (binary) -5.474e+01 -2.145e+02 -9.914e+02 -1.148e+03*

(1.365e+03) (1.626e+02) (1.439e+03) (5.323e+02)

lagged Renewable electricity output (% of total electricity output) -1.741e+02 -6.309e+00 -9.720e+01 -5.525e+01*

(9.150e+01) (7.510e+00) (5.829e+01) (2.594e+01)

lagged residents patent applications (#) 8.512e-

01*** -4.588e-02**

-2.829e-

01*** 8.759e-02**

(7.271e-02) (1.390e-02) (5.452e-02) (2.207e-02)

lagged scientific and technical journal articles (#) -8.004e-01 6.225e-01** 4.631e-01 3.886e-01

(7.498e-01) (1.714e-01) (6.941e-01) (1.976e-01)

lagged population growth (%) -2.711e+03 -1.022e+02 -2.868e+03 -1.920e+03*

(2.122e+03) (3.596e+02) (1.710e+03) (6.576e+02)

lagged energy intensity level of primary energy (MJ/$2011 PPP GDP) -8.008e+03 1.041e+03 3.629e+03 -3.694e+03

(1.088e+04) (1.808e+03) (8.606e+03) (4.014e+03)

lagged oil price (2011$) -1.012e+02 -4.096e+00 -7.145e+01* -4.205e+01

(5.585e+01) (7.631e+00) (3.111e+01) (2.088e+01)

lagged mean temperature (Celsius) 7.908e+02 4.815e+01 -4.625e+01 4.001e+02*

(4.263e+02) (7.144e+01) (2.654e+02) (1.818e+02)

5.228e+02 1.330e+01 4.334e+02* 1.525e+02

lagged CO2 emissions from manufacturing industries and construction (% of total CO2

emissions) (3.103e+02) (4.130e+01) (2.035e+02) (1.313e+02)

lagged global CO2 (PPM) 4.744e+02 1.195e+02 2.807e+02 2.515e+02*

(3.464e+02) (7.265e+01) (1.694e+02) (1.016e+02)

lagged CO2 emissions from residential buildings and commercial and public services (%

of total fuel combustion) 1.720e+02 3.305e+01 -1.637e+02 -3.760e+01

(1.686e+02) (3.697e+01) (2.055e+02) (8.385e+01)

lagged trademark applications (#) -1.270e-01 3.182e-02 7.721e-01*** 1.110e-01

(1.570e-01) (2.074e-02) (6.390e-02) (5.948e-02)

lagged Kyoto target -5.982e+02 -1.016e+02 -8.673e+01 -1.069e+02

(3.428e+02) (5.200e+01) (2.315e+02) (1.384e+02)

Constant -1.790e+05 -4.896e+04 -1.049e+05 -9.200e+04*

(1.368e+05) (3.008e+04) (6.419e+04) (4.038e+04)

p-value (Pr > F) . . . .

R-squared 1.000 1.000 0.998 0.998

Root MSE 2227 183.5 2232 901.8



Table 18. Transition densities for climate and demographic variables


population (#) population

growth (%)

Shannon

Index

(energy

security

index)

mean

temperature

(Celsius)

lagged GDP, PPP (2011$) 1.67e-05 -5.312e-13 -1.794e-14 -7.027e-12

(1.16e-05) (6.800e-13) (4.706e-13) (9.373e-12)

lagged GDP growth (%) -1.435e+05 -3.182e-03 -6.757e-04 1.479e-01

(9.494e+04) (1.149e-02) (1.040e-02) (1.308e-01)

lagged GDP growth squared (%) 5.225e+03 3.147e-04 -3.487e-04 3.918e-03

(1.073e+04) (1.109e-03) (1.051e-03) (1.274e-02)

lagged GDP per capita growth (%) 1.253e+05 3.815e-03 1.372e-02 -1.009e-01

(6.200e+04) (1.004e-02) (7.458e-03) (8.595e-02)

lagged GDP per capita growth squared (%) -9.243e+03 -1.046e-03 -2.781e-04 1.542e-02

(4.379e+03) (7.374e-04) (5.314e-04) (8.648e-03)

lagged energy use per GDP (kg of oil equivalent per $1,000

GDP)

-8.143e+04 3.634e-02 -3.635e-02 1.799e-01

(3.280e+05) (2.109e-02) (2.207e-02) (2.469e-01)

lagged energy use (kg of oil equivalent)

2.839e+04 -1.050e-03

-1.743e-

02** -2.830e-02

(6.819e+04) (6.743e-03) (4.510e-03) (7.360e-02)

lagged electric power consumption (kWh per capita) 8.824e+02 -6.76e-06 2.25e-05 -7.139e-04

(8.057e+02) (6.06e-05) (5.19e-05) (7.827e-04)

lagged total electricity net consumption (billion kWh) -2.857e+04 -1.327e-03 1.606e-03 -2.879e-02

(2.981e+04) (2.500e-03) (1.811e-03) (2.265e-02)

lagged total petroleum consumption (thousand barrel per day) -7.212e+05** -8.730e-03 1.584e-02 -3.143e-02

(1.963e+05) (1.332e-02) (1.025e-02) (1.438e-01)

lagged total coal consumption (quadrillion Btu) -2.819e+06 -8.540e-02 3.465e-02 -7.066e-01

(2.798e+06) (2.440e-01) (2.195e-01) (2.158e+00)

lagged gross marketed dry natural gas consumption (billion

cubic meter)

-1.132e+05* -3.345e-03 7.195e-03 8.958e-02

(5.218e+04) (3.122e-03) (3.759e-03) (6.415e-02)

lagged CO2 emissions (kt) 1.599e+02*** 4.05e-06 2.21e-06 2.36e-05

(3.562e+01) (3.04e-06) (3.58e-06) (3.34e-05)

lagged CO2 emissions (kg per 2011 PPP $ of GDP) -2.993e+06 -5.371e+00** -3.508e+00 -5.408e+01

(2.105e+07) (1.623e+00) (1.999e+00) (2.595e+01)

lagged CO2 emissions (metric tons per capita) -2.684e+06* 7.934e-02 -9.448e-02 7.952e-01

(1.208e+06) (7.106e-02) (5.518e-02) (1.229e+00)

lagged CO2 emissions from other sectors, excluding

residential buildings and commercial and public services (%

of total fuel combustion)

-3.040e+04 4.289e-02 -4.494e-02 9.285e-01

(6.397e+05) (3.423e-02) (4.170e-02) (6.932e-01)

lagged gross natural gas production (billion cubic meter) -1.039e+05 -3.929e-04 3.235e-03 -4.619e-02

(6.354e+04) (4.368e-03) (3.079e-03) (4.967e-02)

lagged total oil supply (thousand barrel per day) 5.052e+03 -1.059e-04 1.48e-05 -6.324e-04

(2.734e+03) (1.870e-04) (1.247e-04) (1.797e-03)

lagged dummy for wind electricity net generation (binary) 2.205e+06 1.106e-02 4.784e-02 -1.092e+00

(1.543e+06) (1.196e-01) (1.171e-01) (1.230e+00)

lagged solar electricity net generation (billion kWh) -1.160e+05 1.987e-02 3.875e-03 -7.685e-02

(1.355e+05) (1.500e-02) (1.004e-02) (1.608e-01)

lagged dummy for solar electricity net generation (binary) -1.462e+06 7.786e-03 -4.486e-02 1.753e+00

(7.683e+05) (6.630e-02) (8.783e-02) (1.106e+00)

lagged Renewable electricity output (% of total electricity

output)

-5.975e+04 -5.816e-04 -2.956e-03 7.393e-02

(4.219e+04) (3.309e-03) (3.106e-03) (4.745e-02)

lagged residents patent applications (#) 1.735e+01 -2.14e-06 1.14e-07 5.37e-05

(5.303e+01) (2.55e-06) (2.14e-06) (2.93e-05)

lagged scientific and technical journal articles (#) 1.237e+03* 5.19e-05 -2.46e-05 5.714e-04

(4.555e+02) (3.36e-05) (2.47e-05) (2.915e-04)

lagged population growth (%) -2.745e+06 4.598e-01*** -1.357e-01 -1.096e-01

(1.741e+06) (1.126e-01) (1.400e-01) (1.553e+00)

lagged energy intensity level of primary energy (MJ/$2011

PPP GDP)

3.052e+06 -6.468e-01 1.127e+00* -1.891e+00

(7.648e+06) (5.411e-01) (4.833e-01) (5.388e+00)

lagged oil price (2011$) -3.247e+04 1.532e-03 -2.990e-03 2.836e-02

(2.167e+04) (3.123e-03) (2.463e-03) (3.764e-02)

lagged mean temperature (Celsius) -4.213e+03 -1.929e-02 2.861e-02 2.946e-01

(1.695e+05) (1.371e-02) (2.193e-02) (1.736e-01)

lagged CO2 emissions from manufacturing industries and

construction (% of total CO2 emissions) 3.858e+05 6.797e-03 -6.883e-03 -4.035e-01*

(2.216e+05) (1.208e-02) (1.923e-02) (1.604e-01)

lagged global CO2 (PPM) -6.674e+04 -1.937e-02 -7.309e-04 2.487e-01

(1.926e+05) (1.886e-02) (1.422e-02) (2.305e-01)

lagged CO2 emissions from residential buildings and

commercial and public services (% of total fuel combustion) -1.209e+05 -2.306e-02* 7.008e-03 -2.660e-01*

(1.345e+05) (1.034e-02) (1.354e-02) (1.125e-01)

lagged trademark applications (#) 1.012e+02 8.77e-07 8.75e-06 6.59e-05

(8.054e+01) (6.05e-06) (8.26e-06) (7.80e-05)

lagged Kyoto target -1.301e+05 1.401e-02 -4.339e-03 6.010e-01**

(1.783e+05) (1.420e-02) (1.777e-02) (1.589e-01)

Constant 3.077e+07 7.466e+00 1.978e+00 -8.604e+01

(8.008e+07) (7.608e+00) (5.761e+00) (9.410e+01)

p-value (Pr > F) . . . .

R-squared 0.999 0.977 0.932 0.986

Root MSE 1.516e+06 0.138 0.125 1.719

# observations 64 63 64 63 Notes: Standard errors clustered by country in parentheses. Significance codes: *** p<0.001, ** p<0.01, * p<0.05.

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