Inequality in carbon intensity in EU-28: analysis based on club convergence

This study examines the convergence properties of CO₂ intensity in EU-28 countries, using panel data for the period 1990 to 2016. We use Phillips and Sul's (2007) approach to test for CO₂ intensity convergence and identify convergence clubs. In addition to the EU-28 members, we analyze the EU-15, and the new EU members (EU-new) that joined after 2004, as distinct groups for the periods 1990-2016, 1990-2004, and 2005-2016. Our results show no convergence to a single group among the EU countries during the full and two subsample periods. However, the convergence takes place within five to seven clubs for the EU-28 and within three to five clubs for the EU-15 and EU-new. There is no evidence of all members converging to a single club in either group or the three sub-periods examined. This study highlights the need for adopting new strategies considering club properties and for sustainable growth, which meets the EU-28 environmental regulation standards.