Foreign direct investments and <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" altimg="si2.svg"> <mml:mrow> <mml:mi>C</mml:mi> <mml:msub> <mml:mi>O</mml:mi> <mml:mn>2</mml:mn> </mml:msub> </mml:mrow> </mml:math> emissions in Asia: A data-dri

The environmental implications of Foreign Direct Investment (FDI) remain a topic of debate, with traditional models facing challenges in establishing a clear nexus between FDI and emissions. Against this background, we propose a novel, non-parametric approach based on Optimal Transport theory to examine the evolution of joint and conditional distributions of FDI and carbon emissions ( C O 2 ) across Asia. Leveraging satellite data, our method estimates optimal transport maps that represent the least costly way to transition between FDI and emissions distributions over time. We further construct one-period-ahead distributional forecasts using Wasserstein barycentric interpolation, ensuring minimal divergence from past observations. Our data-driven framework captures complex, nonlinear dependencies without imposing rigid parametric assumptions. The analysis reveals a positive relationship between FDI and C O 2 emissions, with aggregate forecasts indicating a generally increasing trend for both variables. However, distinct patterns emerge across selected countries, suggesting heterogeneous environmental impacts of FDI.