Significance of Economic Activities in Environmental Protection: Evidence from a Panel of 4-ASEAN Economies

Satria Tirtayasa, A. Akrim, Ade Gunawan, Emilda Sulasmi and Hastin Umi Anisah
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Satria Tirtayasa: Universitas Muhammadiyah Sumatera Utara, Jl. Kapten Muchtar Basri No. 3, Medan, Sumatera Utara 20238, Indonesia,
A. Akrim: Universitas Muhammadiyah Sumatera Utara, Jl. Kapten Muchtar Basri No. 3, Medan, Sumatera Utara 20238, Indonesia,
Ade Gunawan: Universitas Muhammadiyah Sumatera Utara, Jl. Kapten Muchtar Basri No. 3, Medan, Sumatera Utara 20238, Indonesia,
Emilda Sulasmi: Universitas Muhammadiyah Sumatera Utara, Jl. Kapten Muchtar Basri No. 3, Medan, Sumatera Utara 20238, Indonesia,
Hastin Umi Anisah: Universitas Lambuung Mangkurat, Jl. H. Hasan Basry, Banjarmasin, Kalimantan Selatan 70123, Indonesia.

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 2, 420-426

Abstract: Environmental degradation is increasing gradually due to economic activities by the Association of Southeast Asian Nations (ASEAN). ASEAN energy center estimated 4.4% increase in the consumption of final energy among ASEAN nations in 2030 which is greater than the average growth rate of 1.44%. The current study empirically analyzes the impact of economic activities on environmental protection across four largest ASEAN economies (Indonesia, Thailand, Singapore and Malaysia) over a period of 1998-2018. In order to achieve this objective, the study employs several panel econometric tests; ADF, panel cross-sectional dependence, Johansen-Fisher panel cointegration, FMOLS and country specific long run output method. The study finds significant positive impact of non-renewable energy consumption (NRNC), GDP and labor force on CO2 emission. Renewable energy consumption (RNC) has negative impact on CO2 emission. As RNC causes reducing CO2 emission in the sample ASEAN economies, the study suggests the policy makers to inductee effective policies to encourage the generation of renewable energy and its uses across ASEAN economies. While the generation of non-renewable energy should be discouraged as it promotes CO2 emission.

Keywords: Economic Activities; Energy Consumption; GDP; ASEAN; FMOLS. (search for similar items in EconPapers)
JEL-codes: K32 R11 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2021-02-50

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