The impact of international trade on a sustainable environmental economy

This study investigates the dynamic relationship between international trade, economic growth, maritime logistics connectivity, urbanisation, and greenhouse gas (GHG) emissions in 18 Asian countries over the period 2006–2023. Asia plays a central role in the global economy and contributes a substantial share of worldwide emissions, making it a critical region for understanding trade–environment interactions. Using a dynamic panel data approach, this study employs the System Generalised Method of Moments (System GMM) to address emission persistence and potential endogeneity among variables. The empirical model incorporates real GDP per capita and its squared term to test the Environmental Kuznets Curve (EKC) hypothesis, total merchandise trade as a proxy for trade openness, the Liner Shipping Connectivity Index (LSCI) to capture maritime logistics efficiency, and urbanisation as a structural control variable. The results reveal strong persistence in GHG emissions, indicating path dependency in environmental degradation. Economic growth exhibits a non-linear relationship with emissions, providing empirical support for the EKC hypothesis in the Asian context. International trade openness is found to significantly increase emissions, supporting the pollution haven hypothesis. Importantly, maritime logistics connectivity shows a negative association with GHG emissions, suggesting that improvements in shipping connectivity and logistics efficiency can reduce emission intensity and partially offset the environmental costs of trade expansion. Urbanisation does not display a statistically significant effect on emissions, reflecting heterogeneous urban development patterns across Asian countries. Overall, the findings highlight that achieving a sustainable environmental economy in Asia requires not only managing the scale of economic growth and trade, but also improving its quality through efficient logistics infrastructure, cleaner technologies, and coherent environmental policies. This study provides policy-relevant insights for developing and emerging economies seeking to balance trade integration with climate change mitigation.