Globalization’s effects on South Asia’s carbon emissions, 1996–2019: a multidimensional panel data perspective via FGLS

Abstract

Researchers and policymakers hold diverse opinions about the impact of globalization on environmental degradation. Over the past three decades, increased economic, social, and political interconnections have fueled this debate. However, prior studies have largely overlooked these facets of globalization concerning environmental implications, particularly carbon emissions in developing countries. We contribute to this discourse by examining how various aspects of globalization (economic, social, and political) and two specific measures, de facto and de jure trade, influenced carbon emissions in four selected South Asian countries from 1996 to 2019. The results obtained through feasible generalized least squares (FGLS) reveal that economic globalization increases carbon emissions while social and political globalization reduces them. These results further confirm that, in South Asia, the pollution haven hypothesis is associated only with economic globalization. In contrast, social and political globalization support the world polity theory, indicating potential for positive change. The results also show that both de facto and de jure measures of disaggregated globalization equally influence carbon emissions, suggesting a significant impact from policy interventions. For future environmental sustainability, the governments of these nations should intensify their efforts to strengthen social and political globalization. Meanwhile, the adverse effects of economic globalization can be mitigated by reducing reliance on fossil fuels and providing financial assistance to businesses to encourage the use of renewable energy and modern technology in production.