Exploring the linkage of international trade and environmental pollution in Asia

This paper utilises data from Asian countries from 2000-2020 (with consideration of the COVID-19 period) to explore the linkage between international trade and environmental pollution in this region. After controlling for heteroscedasticity and autocorrelation, results of a fixed-effect regression show that the export turnover, import turnover, GDP per capita, electricity consumption, population growth rate, and net receipt ratio of FDI to GDP have significantly improved the level of CO2 emission in Asia. In addition, the paper also confirms the existence of the environmental Kuznets curve and that maintaining a surplus trade balance will help reduce CO2 emissions in a country. These empirical insights are particularly interesting to policymakers since they help build sensible policies about economic growth, energy conservation, and foreign direct investment to improve environmental quality.