TITLE:
Examining the Effects of Labor Productivity on Air Pollution in a Changing Climate
AUTHORS:
Hsiao-I Kuo, Shu-Chen Chang
KEYWORDS:
CO2 Emissions, Labor Productivity, Climate Change, Income
JOURNAL NAME:
Modern Economy,
Vol.15 No.12,
December
13,
2024
ABSTRACT: This paper investigates the nonlinear effects of labor productivity on air pollution in the context of climate change, using a dataset of 52 countries over the period 1971-2015. The analysis reveals a threshold effect on CO2 emissions, indicating that the influence of labor productivity and income on emissions varies based on temperature regimes. Our findings show that in the non-high temperature regime, the coefficient for labor productivity is significant and negative at the 5% significance level, suggesting that CO2 emissions decrease as labor productivity increases. This emphasizes the role of labor productivity in reducing emissions in cooler climate conditions. Additionally, the coefficients for GDP and its squared term are both positive and significant at the 5% level, indicating that higher GDP is associated with increased CO2 emissions. The positive and significant coefficient for lagged CO2 emissions further suggests a persistence in emissions over time, reinforcing the cumulative impact of economic activity on environmental degradation.