Convergence in Green Growth as the Key to Fighting Climate Change, 1990–2019

Abstract

The consequences of climate change are an important point of contention in the current policy debate on the sustainability of economic development and growth. Climate change contributes to many socio-economic disadvantages and risks. The primary objective of global policy 2050 is to fully understand the negative externalities of environmental change. Goal and methodology: the main goal of the study is to examine convergence to the steady green growth state for a sample of 130 countries from 1990 to 2019. Setting up an efficient and consistent policy to fight climate change demands empirical knowledge on green growth. Using log (t) test methodology, we investigate convergence in green growth indicators for selected samples based on available country data. Findings: our assumptions are: (1) economies are not motivated and eager to foster energy transition; instead, they accept it as a random policy goal and (2) economies want to foster energy transition, but they are limited by a significant trade-off factor pulling their efforts down. Convergence testing shows the existence of two significant convergence clubs, one with countries moving to energy transition and the second still promoting national output based on fossil fuels. The findings indicate future divergence between the two clubs and significant convergence within identified convergence clubs. Conclusions: the energy transition is moving forward at two-tier speed with green leaders and green follower clubs. Policymakers and practitioners must closely monitor the dynamics of green growth to assess the risk and uncertainties of climate change.

Keywords

• convergence
• green growth
• climate change
• sustainability
• energy transition