The assessment of environmental sustainability: The role of research and development in ASEAN countries

Considering the set targets of the Association of Southeast Asian Nations (ASEAN) to increase Research and Development (R&D) expenditures, this study probes the long term and causal association between Renewable Energy (RE), Non-renewable Energy (NRE), Economic growth (GDP) and Ecological Footprints (EF) in the context of Environmental Kuznets curve (EKC). Empirical evidence is based on the panel data throughout 1990-2016 for the selected 6 ASEAN economies. Westerlund Co-integration test confirms the long-run association between R&D, RE, NRE, GDP, and EF. Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) results confirm the presence of EKC and show that R&D expenditures lower EF significantly. A 1% increase in R&D and RE is lowering EF by 0.01% and 0.27% respectively. Moreover, 1% increase in GDP and NRE is increasing EF by 5.52% and 0.17% respectively. This means that investment in R&D will enhance air quality by lowering EF in estimated panel countries. Moreover, NRE consumption and economic growth increase EF. The panel causality results confirm the bidirectional association between GDP, RE use, R&D expenditures, and EF. To achieve a desirable goal of a clean environment, R&D expenditures hold a strong position for ASEAN countries. This finding enforces the governments to involve public and private investments in R&D programs for energy efficiency.

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