The Impact of Economic Complexity on Carbon Intensity: A Dynamic Analysis of OECD Countries
DOI:
https://doi.org/10.63556/ankad.v10i1.351Keywords:
Carbon intensity, Economic complexity, System GMM, Sustainable developmentAbstract
This study examines the effects of economic complexity on carbon intensity using dynamic panel data methods including data from 36 OECD countries over the period 1995-2023. Carbon intensity, which reflects the environmental efficiency of economic production, was used as the dependent variable, while the economic complexity index was the main explanatory variable. The analysis was conducted using the System Generalized Method of Moments to address potential endogeneity issues and account for dynamic dependence.
The results indicate that carbon intensity is highly persistent and that past emission levels strongly influence current environmental performance. The coefficient for economic complexity was positive in the short run, but the interaction term with income level (ECI × lnGDPper) was negative and significant. This suggests that economic complexity increases carbon intensity at low-income levels but decreases emissions at high-income levels. Additionally, trade openness is found to reduce carbon intensity, while capital formation has a positive effect.
Accordingly, the findings indicate that the environmental impact of economic complexity is conditional and varies depending on the stage of development. It is emphasized that complexity supports low-carbon production in high-income and technology-driven economies, and therefore structural transformation should play a central role in climate policies.
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