CO2 emissions, economic growth, energy consumption and trade openness relationship in Asian countries: Application of panel analysis to explore thresholds across development periods


Authors

  • Le Hang My Hanh Foreign Trade University – Ho Chi Minh City Campus
  • Tran Ngoc Bao Tram Foreign Trade University – Ho Chi Minh City Campus
  • Ho Minh Trung Foreign Trade University – Ho Chi Minh City Campus
DOI: https://doi.org/10.57110/vnu-jeb.v5i6.381

Keywords:

energy consumption, economic growth, trade openness, ASIA, CO2 emissions

Abstract

This study explores the dynamic relationships between energy consumption, trade openness, economic growth, and carbon emissions in 36 Asian nations across different income levels from 1992 to 2021. Using the panel Autoregressive Distributed Lag model with Error Correction, along with Fully Modified Least Squares), Canonical Cointegration Regression, Feasible Generalized Least Squares, and the Granger causality test, we identify an inverted U-shaped relationship between gross domestic product and CO2 emissions in the long run for all income groups. However, in the short-run, this relationship holds only for high-income and all countries groups, as there is no evidence to confirm this relationship in upper-middle-income and low and lower-middle-income groups. Additionally, except for high-income nations, a bidirectional causal link exists between economic growth, trade openness, and energy consumption. Moreover, while trade openness shows no clear correlation with carbon emissions in the short run, this factor indicates different impacts on environment in different groups of countries. Energy consumption remains positively associated with CO2 pollution. These findings offer valuable insights for policymakers in designing effective CO2 mitigation strategies tailored to different economic contexts, contributing to sustainable development goals.

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25-12-2025

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Le Hang My Hanh, Tran Ngoc Bao Tram, & Ho Minh Trung. (2025). CO2 emissions, economic growth, energy consumption and trade openness relationship in Asian countries: Application of panel analysis to explore thresholds across development periods. VNU University of Economics and Business, 5(6). https://doi.org/10.57110/vnu-jeb.v5i6.381

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