Economic growth and CO2 emissions

This article considers a planner's optimum control exercise with environmental pollution and derives a testable link between the growth rates of consumption and pollution. The link is then empirically estimated for the case of CO2 emissions for a sample consisting of the union of top 25 countries in terms of CO2 emissions, population and per capita GNP. The analysis suggests that the interrelationship between the growth rates of CO2 emission and economic development is mostly significant for countries that have a high level of CO2 emissions and population. © Springer Science+Business Media B.V. 2009.