Trade Openness, Economic Growth and Environmental Degradation in Asian developing countries
Humanity faces two major challenges, economic development and environment quality. While both developed countries and developing countries have seen the environment becoming one of the most contemporary issues in the 21st century, environmental deterioration at the cost of economic growth is severe in developing countries. This study examines the effects of trade openness and economic growth on CO2 emission using theoretical trade models. The results indicate that the increase of trade openness, including exports and imports, intensifies environmental degradation. Yet, the increase in imports resulting in the advance of the technology has positive effect on environmental quality, implying a possible existence of the Environmental Kuznets Curve (EKC). This study further confirms these findings using panel framework based on annually data from a panel of 6 developing countries in Asia along 1986-2013. The results show that trade openness and economic growth intensifyCO2 emission. However, the study does not give support to the validity of the EKC. The findings of this study put emphasis on the need for government's intervention with stringent environmental policies such as command-and-control regulation, market-based environmental regulation, carbon tax or cap-and-trade policies with the view to reducing emission and creating sustainable development. Ill
v, 66 p.
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