Carbon emission and production technology: evidence from the US

Production technology is the main driving force of economic growth while upgraded technology reduces carbon emission. This paper investigates the long run relation with short run dynamics using the USA data for the period of 1963 -2007. This paper observes that production technology is the cause of reduction of CO2 emission only in short run. The impulse response of production technology suggests shortening the patent protection right that might encourage redesigning low carbon production processes to curve down carbon emission with raising income. Continuous change and adaption of production technology is the main driving force for sustainable development.