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EMF OP 53: U.S. Carbon Emissions, Technological Process, and Economic Growth Since 1870

Occasional Paper

The long-term U.S. experienceemphasizes the importance of controlling for electrification and othermajor technology transformations when evaluating the growth of carbonemissions at different stages of development. Prior to World War I,carbon emissions grew faster than economic growth by 2.3% per year. Aselectricity use expanded and steam engines became much larger, carbonemissions began to grow slower than economic growth by 1.6% per year.Adjusting for this technological shift, an expanding economy continuesto increase carbon emissions by about 9% for each 10% faster growth.There is little evidence for a decline in this elasticity as the incomelevel rises. These results suggest that the United States today willneed to find additional policies to curb carbon emissions if it wishesto prevent any further increase in its per capita emissions and its percapita economy grows by more than 1.8 percent per year.

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