The impacts of economic freedom on the environment: The case of carbon dioxide emissions in seven ASEAN countries

Abstract

Global warming has been acknowledged as one of the main environmental issues, and economic freedom as one of the institutional factors is believed to be the key to protecting the environment. This study evaluates the proposition that countries with higher economic freedom will have a better environment than countries with a dictatorship government. This study uses panel data regression data from 2011 to 2017 and consists of seven ASEAN Countries. This study constructs an econometrics model with three main variables, i.e., economic freedom, Information, and Communication Technology (ICT), and real gross domestic products (GRDP) that have an impact on carbon dioxide (CO2) emissions. The main results show that (1) higher economic freedom leads to low CO2 emissions. (2) better Information and Communication Technology reduces the level of CO2 emissions. And (3) Positive economic growth influence a higher level of CO2 emissions. The policy implication implies that the governments in seven ASEAN countries should support more economic freedom to support a better environment, use efficient ITC that leads to the protection of the environment. Apply the environmental statistics into the calculation of GRDP to improve countries’ capacities to manage their economies and natural resources.