The Impact of Institutional Quality on Carbon Dioxide Emission : A Case Study in Asia - Pasific Countries
DOI:
https://doi.org/10.37385/ijedr.v4i6.6745Keywords:
Institutional Quality, Environmental Quality, Asia-Pasific, CO2 EmissionsAbstract
Environmental issues occurring in the Asia Pacific region have become a highlight among state institutions. The recent increase in carbon dioxide emissions is considered a representation of environmental damage. The purpose of this study is to examine the effect of institutional quality on carbon dioxide emissions in 24 Asia Pacific countries. The interaction variables of GDP per capita and institutional quality, EKC hypothesis, urbanization and energy consumption are also used. The data were processed using STATA version 17 using the Generalize Moment of Method (GMM) estimation. The results of the study indicate that institutional quality, the interaction of GDP per capita and institutional quality have a significant negative effect on carbon dioxide emissions. GDP per capita has a significant negative effect on carbon dioxide emissions, but GDP per capita squared is significantly positive, meaning that the EKC hypothesis in the Asia Pacific case is contrary to the EKC Inverted U theory. Meanwhile, urbanization has a significant negative effect and energy consumption has a significant positive effect on carbon dioxide emissions. Finally, this study also suggests some valuable policy suggestions for governments/policymakers in general/specifically regarding developing countries to support their environmental sustainability.
References
Abid, M. (2016). Impact of economic, financial, and institutional factors on CO2 emissions: Evidence from Sub-Saharan Africa economies. Utilities Policy, 41, 85–94. https://doi.org/10.1016/j.jup.2016.06.009
Adrian, M. A. (2024). Analisis Pengaruh Aktivitas Ekonomi terhadap Peningkatan Emisi Karbon: Studi Empiris Empat Negara ASEAN. Jurnal Ekonomi Indonesia, 12(2), 187–202. https://doi.org/10.52813/jei.v12i2.379
Al-Mulali, U., & Ozturk, I. (2015). The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region. Energy, 84, 382–389. https://doi.org/10.1016/j.energy.2015.03.004
Ali, H. S., Abdul-Rahim, A., & Ribadu, M. B. (2017). Urbanization and carbon dioxide emissions in Singapore: evidence from the ARDL approach. Environmental Science and Pollution Research, 24(2), 1967–1974. https://doi.org/10.1007/s11356-016-7935-z
Ali, H. S., Zeqiraj, V., Lin, W. L., Law, S. H., Yusop, Z., Bare, U. A. A., & Chin, L. (2019). Does quality institutions promote environmental quality? Environmental Science and Pollution Research, 10446–10456. https://doi.org/10.1007/s11356-019-04670-9
Azam, M., Liu, L., & Ahmad, N. (2021). Impact of institutional quality on environment and energy consumption: evidence from developing world. Environment, Development and Sustainability, 23(2), 1646–1667. https://doi.org/10.1007/s10668-020-00644-x
Balli, E., Sigeze, C., Ugur, M. S., & Çat?k, A. N. (2023). The relationship between FDI, CO2 emissions, and energy consumption in Asia-Pacific economic cooperation countries. Environmental Science and Pollution Research, 30(15), 42845–42862. https://doi.org/10.1007/s11356-021-17494-3
Dietz, T., & Jorgenson, A. (2015). Introduction: Progress in Structural Human Ecology. Human Ecology Review, 22, 3–11. https://doi.org/10.22459/HER.22.01.2015.01
Dietz, T., & Rosa, E. A. (1994). Rethinking the Environmental Impacts of Population, Affluence and Technology. Human Ecology Review, 1(2), 277–300. http://www.jstor.org/stable/24706840
Ehrlich, P. R., & Holdren, J. P. (1971). Impact of Population Growth. Science, 171(3977), 1212–1217. https://doi.org/10.1126/science.171.3977.1212
Gallagher, K. P., & Thacker, S. C. (2008). Democracy , Income , an d Environmental Q uality. Boston University.
Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement. 3914.
Haldar, A., & Sethi, N. (2021). Effect of institutional quality and renewable energy consumption on CO2 emissions?an empirical investigation for developing countries. Environmental Science and Pollution Research, 28(12), 15485–15503. https://doi.org/10.1007/s11356-020-11532-2
Hussain, M., & Dogan, E. (2021). The role of institutional quality and environment-related technologies in environmental degradation for BRICS. Journal of Cleaner Production, 304, 127059. https://doi.org/10.1016/j.jclepro.2021.127059
Ibrahim, M. H., & Law, S. H. (2016). Institutional quality and CO2 emission–trade relations: Evidence from Sub-Saharan Africa. South African Journal of Economics, 84(2), 323–340. https://doi.org/10.1111/saje.12095
IEA. (2018). Global Energy & CO2 Status Report-2017. 2018, 15. https://webstore.iea.org/download/direct/2460
Kamal, M., Usman, M., Jahanger, A., & Balsalobre-Lorente, D. (2021). Revisiting the role of fiscal policy, financial development, and foreign direct investment in reducing environmental pollution during globalization mode: Evidence from linear and nonlinear panel data approaches. Energies, 14(21). https://doi.org/10.3390/en14216968
Kim, D. H., Wu, Y. C., & Lin, S. C. (2018). Heterogeneity in the effects of government size and governance on economic growth. Economic Modelling, 68(October 2016), 205–216. https://doi.org/10.1016/j.econmod.2017.07.014
Kumar, S., & Madlener, R. (2016). CO2 emission reduction potential assessment using renewable energy in India. Energy, 97, 273–282.
Kusumawardani, D., & Dewi, A. K. (2020). The effect of income inequality on carbon dioxide emissions: A case study of Indonesia. Heliyon, 6(8), e04772. https://doi.org/10.1016/j.heliyon.2020.e04772
Lau, L. S., Choong, C. K., & Eng, Y. K. (2014). Carbon dioxide emission, institutional quality, and economic growth: Empirical evidence in Malaysia. Renewable Energy, 68, 276–281. https://doi.org/10.1016/j.renene.2014.02.013
Le, H. P., & Ozturk, I. (2020). The impacts of globalization, financial development, government expenditures, and institutional quality on CO2 emissions in the presence of environmental Kuznets curve. Environmental Science and Pollution Research, 27(18), 22680–22697. https://doi.org/10.1007/s11356-020-08812-2
Leitão, A. (2010). Corruption and the environmental Kuznets Curve: Empirical evidence for sulfur. Ecological Economics, 69(11), 2191–2201. https://doi.org/10.1016/j.ecolecon.2010.06.004
Li, J., Irfan, M., Samad, S., Ali, B., Zhang, Y., Badulescu, D., & Badulescu, A. (2023). The Relationship between Energy Consumption, CO2 Emissions, Economic Growth, and Health Indicators. International Journal of Environmental Research and Public Health, 20(3). https://doi.org/10.3390/ijerph20032325
Li, S., & Zhou, C. (2019). What are the impacts of demographic structure on CO2 emissions? A regional analysis in China via heterogeneous panel estimates. Science of the Total Environment, 650(2019), 2021–2031. https://doi.org/10.1016/j.scitotenv.2018.09.304
Little, W. (2016). Population, urbanization, and the environment. Introduction to Sociology-2nd Canadian Edition.
Makido, Y., Dhakal, S., & Yamagata, Y. (2012). Relationship between urban form and CO 2 emissions: Evidence from fifty Japanese cities. Urban Climate, 2, 55–67. https://doi.org/10.1016/j.uclim.2012.10.006
Malahayati, M., & Masui, T. (2021). Potential impact of introducing emission mitigation policies in Indonesia: how much will Indonesia have to spend? In Mitigation and Adaptation Strategies for Global Change (Vol. 26, Issue 8). Springer Netherlands. https://doi.org/10.1007/s11027-021-09973-2
McGee, J. A., & Greiner, P. T. (2018). Can Reducing Income Inequality Decouple Economic Growth from CO 2 Emissions? . Socius: Sociological Research for a Dynamic World, 4, 237802311877271. https://doi.org/10.1177/2378023118772716
Mehmood, U., Tariq, S., Ul-Haq, Z., & Meo, M. S. (2021). Does the modifying role of institutional quality remains homogeneous in GDP-CO2 emission nexus? New evidence from ARDL approach. Environmental Science and Pollution Research, 28(8), 10167–10174. https://doi.org/10.1007/s11356-020-11293-y
Mu Tashim, T., & Rudatin, A. (2024). Analisis ekonomi negara BRICS terhadap emisi karbon dioksida (CO2). Jurnal Kebijakan Ekonomi Dan Keuangan, 2(2), 205–214. https://doi.org/10.20885/jkek.vol2.iss2.art12
Murshed, M., & Dao, N. T. T. (2022). Revisiting the CO2 emission-induced EKC hypothesis in South Asia: the role of Export Quality Improvement. GeoJournal, 87(2), 535–563. https://doi.org/10.1007/s10708-020-10270-9
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press,.
Ohajionu, U. C., Gyamfi, B. A., Haseki, M. I., & Bekun, F. V. (2022). Assessing the linkage between energy consumption, financial development, tourism and environment: evidence from method of moments quantile regression. Environmental Science and Pollution Research, 29(20), 30004–30018. https://doi.org/10.1007/s11356-021-17920-6
Paul R. Ehrlich and John P. Holdre. (1970). Impact of Population Growth. American Association for the Advancement of Science, 171, 1–7.
Rahman, M. M., & Alam, K. (2022). CO2 Emissions in Asia–Pacific Region: Do Energy Use, Economic Growth, Financial Development, and International Trade Have Detrimental Effects? Sustainability (Switzerland), 14(9). https://doi.org/10.3390/su14095420
Sadiq, M., Shinwari, R., Usman, M., Ozturk, I., & Maghyereh, A. I. (2022). Linking nuclear energy, human development and carbon emission in BRICS region: Do external debt and financial globalization protect the environment? Nuclear Engineering and Technology, 54(9), 3299–3309. https://doi.org/10.1016/j.net.2022.03.024
Shahbaz, M. (2022). Globalization–emissions nexus: testing the EKC hypothesis in Next-11 Countries. Global Business Review, 23(1), 75–100.
Tuda, A. O., & Machumu, M. E. (2019). Institutions and adaptive capacity for marine biodiversity conservation. Environmental Science and Policy, 100(March), 238–246. https://doi.org/10.1016/j.envsci.2019.03.012
Wang, N., Zhu, H., Guo, Y., & Peng, C. (2018). The heterogeneous effect of democracy, political globalization, and urbanization on PM2.5 concentrations in G20 countries: Evidence from panel quantile regression. Journal of Cleaner Production, 194, 54–68. https://doi.org/10.1016/j.jclepro.2018.05.092
Wawrzyniak, D., & Dory?, W. (2020). Does the quality of institutions modify the economic growth-carbon dioxide emissions nexus? Evidence from a group of emerging and developing countries. Economic Research-Ekonomska Istrazivanja , 33(1), 124–144. https://doi.org/10.1080/1331677X.2019.1708770
Xu, X., Zeng, L., Li, S., Liu, Y., & Zhang, T. (2024). Dynamic nonlinear CO2 emission effects of urbanization routes in the eight most populous countries. PLoS ONE, 19(2 February), 1–24. https://doi.org/10.1371/journal.pone.0296997
Yang, B., Usman, M., & jahanger, A. (2021). Do industrialization, economic growth and globalization processes influence the ecological footprint and healthcare expenditures? Fresh insights based on the STIRPAT model for countries with the highest healthcare expenditures. Sustainable Production and Consumption, 28(August), 893–910. https://doi.org/10.1016/j.spc.2021.07.020
Yu, Y., Jiang, T., Li, S., Li, X., & Gao, D. (2020). Energy-related CO2 emissions and structural emissions’ reduction in China’s agriculture: An input–output perspective. Journal of Cleaner Production, 276, 124169. https://doi.org/10.1016/j.jclepro.2020.124169