Exploring the environmental Kuznets curve for CO2 and SO2 for Southeast Asia in the 21st century context

Abstract

This study aims to investigate the relationships between economic development and environmental degradation regarding the emissions of CO2 and SO2 in Southeast Asia (SEA). The pooling data consist of 10 countries, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, the Philippines, Thailand, and Vietnam, in the period 2003-2012. Furthermore, income elasticity of CO2 and SO2 emissions is computed for each country to observe the sensitivity of environmental degradation through the emissions of CO2 and SO2 brought by economic development. The results indicate that CO2 displays an inverted U-shape pattern, whereas SO2 has decreased at an increasing rate since 2003. It is expected that SO2 will increase as the SEA economies further develop. The turning points for both CO2 and SO2, indicate that the current SEA income level has not reached the turning point. The income elasticities show that income elasticities for CO2 are positive for all 10 countries. Both Singapore and Malaysia are classified as countries with high income. However, Singapore, with 0.64%, has the highest income elasticity, and Malaysia, with 0.15%, has the second lowest. There is no indication that wealthy countries have a significant impact on CO2 through economic development. Income elasticities for SO2 of each country are all negative. This suggests that SO2 is an inferior good. Brunei, with 8.41%, has the most sensitivity toward change in SO2 emissions, whereas Myanmar, with only 0.58%, is the least sensitive to SO2 emissions.