DOES ECONOMIC GROWTH INFLUENCE THE REDUCTION OF CARBON DIOXIDE EMISSIONS? EVIDENCE FOR THE UNITED STATES-MEXICO-CANADA AGREEMENT

This study aims to measure the impact of goods and services production on carbon dioxide (CO2) emissions. The research is supported by a theoretical and methodological framework that incorporates a production function with two outputs. This approach makes it possible to demonstrate that emissions tend to reduce with economic growth. The research uses panel data for the North American region. The findings reveal significant differences across countries: the U.S. and Canada demonstrate a stronger emissions-reduction effect compared to Mexico. The findings reveal that in the thirty years since the United States-Mexico-Canada (USMCA) agreement was signed, CO2 emissions have dropped while the economy of the region has grown. The findings emphasize the need for increased coordination among national governments in executing public policies on reducing CO2 emissions, the main gas that causes the greenhouse effect, to mitigate environmental degradation. These results are consistent with the studies conducted for European countries that are members of the Organization for Economic Co-operation and Development (OECD).