THE IMPACTS OF ECONOMIC GROWTH, FINANCIAL DEVELOPMENT AND ENERGY CONSUMPTION ON CO2 EMISSIONS IN FOUR ASEAN COUNTRIES

Abstract

This study investigates the impacts of economic growth, financial development and energy consumption on CO2 emissions in 4 ASEAN countries, which are Malaysia, Philippines, Singapore and Thailand. It also tests whether an Environment Kuznets Curve (EKC) relationship hold in these countries. In the long run, there is no evidence that economic growth and energy consumption can lead to higher level of CO2 emissions in Malaysia, Philippines and Thailand, while in Singapore both economic growth and energy consumption are positive and statistically significant with respect to CO2 emissions. In the short run, economic growth is a major contributor to CO2 in Philippines, Singapore and Thailand. Energy consumption is also positively related to CO2 emissions in Philippines, Singapore and Malaysia. However, financial development is statistically insignificant in all 4 countries in both short run and long run. The EKC is valid only in the case of Singapore and its long-run elasticities of each variable with respect to CO2 emissions are higher than the short-run elasticities.