A Test of Pollution Haven Hypothesis (PHH) in the Environmental Kuznets Curve (EKC) Framework in Selected ASEAN Countries

Fozia Latif  Gill; K.Kuperan  Viswanathan; Mohd. Zaini  Abdul Karim

doi:10.32890/jgd2017.13.2.8

Authors

Fozia Latif Gill Universiti Utara Malaysia, Malaysia
K.Kuperan Viswanathan Universiti Utara Malaysia, Malaysia
Mohd. Zaini Abdul Karim Universiti Utara Malaysia, Malaysia

DOI:

https://doi.org/10.32890/jgd2017.13.2.8

Keywords:

CO2 emission, Pollution-intensive industries, Trade

Abstract

The underlying study focuses on Pollution Haven Hypothesis (PHH) from the
trade perspective for the Association of South East Asian Nations (ASEAN)
countries for the period 1989 -2015. The PHH claims that in open trade
regime developing countries tend to specialize and export pollution-intensive
goods. This study examines this proposition in the context of ASEAN versus
United states of America (USA) trade. The results indicate that exports
of pollution-intensive- goods from ASEAN countries to USA significantly
contribute to the pollution thereby, delaying the turning point income level
of the EKC in ASEAN countries. The study, therefore, concludes that world
pollution cannot be tackled unless advanced countries do not curtail the
consumption of pollution-intensive goods.

References

Albornoz, F., Cole, M. A., Elliott, R. J., & Ercolani, M. G. (2009). In search of environmental spillovers. The World Economy, 32(1), 136-163.

Anderson, K., Blackhurst, R., & Secretariat, G. (1992). The greening of world trade issues: Harvester Wheatsheaf London.

Ang, J. B. (2007). CO 2 emissions, energy consumption, and output in France. Energy Policy, 35(10), 4772-4778.

Apergis, N., & Payne, J. E. (2009). CO 2 emissions, energy usage, and output in Central America. Energy Policy, 37(8), 3282-3286.

Atici, C. (2009). Carbon emissions in Central and Eastern Europe: environmental Kuznets curve and implications for sustainable development. Sustainable Development, 17(3), 155-160.

Atici, C. (2012). Carbon emissions, trade liberalization, and the Japan– ASEAN interaction: A group-wise examination. Journal of the Japanese and International Economies, 26(1), 167-178.

Aubourg, R. W., Good, D. H., & Krutilla, K. (2008). Debt, democratization, and development in Latin America: How policy can affect global warming. Journal of Policy Analysis and Management, 27(1), 7-19.

Azhar, A., & Elliott, R. J. (2007). Trade and Specialisation in Pollution Intensive Industries: North–South Evidence. International Economic Journal, 21(3), 361-380.

Beladi, H., & Oladi, R. (2011). Does trade liberalization increase global pollution? Resource and Energy Economics, 33(1), 172-178.

Breitung, J. (1999). The local power of some unit root tests for panel data.

Cole, M. A. (2000). Trade liberalisation, economic growth and the environment. Books.

Cole, M. A. (2004). Trade, the pollution haven hypothesis and the environmental Kuznets curve: Examining the linkages. Ecological Economics, 48(1), 71-81.

Cole, M. A., & Elliott, R. J. (2003). Determining the trade–environment composition effect: the role of capital, labor and environmental regulations. Journal of Environmental Economics and Management, 46(3), 363-383.

Cole, M. A., & Elliott, R. J. (2005). FDI and the capital intensity of “dirty” sectors: a missing piece of the pollution haven puzzle. Review of Development Economics, 9(4), 530-548.

Cole, M. A., Elliott, R. J., & Fredriksson, P. G. (2006). Endogenous pollution havens: Does FDI influence environmental regulations? The Scandinavian Journal of Economics, 108(1), 157-178.

Copeland, B. R., & Taylor, M. S. (1994). North-South trade and the environment. The quarterly journal of Economics, 755-787.

Dinda, S. (2004). Environmental Kuznets curve hypothesis: a survey. Ecological Economics, 49(4), 431-455.

Elliott, R. J., & Shimamoto, K. (2008). Are ASEAN Countries Havens for Japanese Pollution‐Intensive Industry? The World Economy, 31(2), 236-254.

Esty, D. C. (1994). Greening the GATT: Trade, environment, and the future: Peterson Institute.

Esty, D. C. (2001). Bridging the trade-environment divide. Journal of Economic Perspectives, 113-130.

Fisher, R. (1932). Statistical Methods for Research Workers (Edinburgh:

Oliver and Boyd, 1925). Google Scholar.

Frankel, J. A., & Rose, A. K. (2005). Is trade good or bad for the environment? Sorting out the causality. Review of economics and statistics, 87(1), 85-91.

Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement. Retrieved from Cambridge:

Haisheng, Y., Jia, J., Yongzhang, Z., & Shugong, W. (2005). The impact on Environmental Kuznets Curve by trade and foreign direct investment in China. Chinese Journal of Population Resources and Environment, 3(2), 14-19.

Halicioglu, F. (2009). An econometric study of CO 2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy, 37(3), 1156-1164.

Hassaballa, H. (2013). Environment and foreign direct investment: policy implications for developing countries. Journal of Emerging Issues in Economics, Finance and Banking, 1(2), 75-106.

He, J., & Wang, H. (2012). Economic structure, development policy and environmental quality: An empirical analysis of environmental Kuznets curves with Chinese municipal data. Ecological Economics, 76, 49-59.

Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74.

Jaffe, A. B., Peterson, S. R., Portney, P. R., & Stavins, R. N. (1995). Environmental regulation and the competitiveness of US manufacturing: what does the evidence tell us? Journal of Economic literature, 132-163.

Jain, S., & Chaudhuri, T. D. (2009). The Environmental Kuznets Curve: A Reaffirmation. ICFAI Journal of Environmental Economics, 7(2).

Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of econometrics, 90(1), 1-44.

Kivyiro, P., & Arminen, H. (2014). Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: Causality analysis for Sub-Saharan Africa. Energy, 74, 595-606.

Levin, A., Lin, C.-F., & Chu, C.-S. J. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of econometrics, 108(1), 1-24.

Mani, M., & Wheeler, D. (1998). In search of pollution havens? Dirty industry in the world economy, 1960 to 1995. The Journal of Environment & Development, 7(3), 215-247.

Muradian, R., & Martinez-Alier, J. (2001). Trade and the environment: from a ‘Southern’perspective. Ecological Economics, 36(2), 281-297.

Panayotou, T. (1995). Environmental degradation at different stages of economic development. Beyond Rio: The Environmental Crises and Sustainable Livelihoods in the Third World, Macmillan Press, London, UK.

Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and statistics, 61(s 1), 653-670.

Pedroni, P. (2001). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727-731.

Rehman, F. U., Nasir, M., & Kanwal, F. (2012). Nexus between corruption and regional Environmental Kuznets Curve: the case of South Asian countries. Environment, Development and Sustainability, 14(5), 827841.

Richmond, A. K., & Kaufmann, R. K. (2006). Is there a turning point in the relationship between income and energy use and/or carbon emissions? Ecological Economics, 56(2), 176-189.

Shafik, N., & Bandyopadhyay, S. (1992). Economic growth and environmental quality: time-series and cross-country evidence (Vol. 904). The World Bank, Washington, DC.: World Bank Publications.

Takeda, F., & Matsuura, K. (2006). Trade and the Environment in East Asia. Korea and the World Economy, 7(1), 33-56.

Tobey, J. A. (1990). The effects of domestic environmental policies on patterns of world trade: an empirical test. Kyklos, 43(2), 191-209.

Webber, D. J., & Allen, D. O. (2004). Environmental Kuznets Curves: Mess or Meaning? Retrieved from

Xing, Y., & Kolstad, C. D. (2002). Do lax environmental regulations attract foreign investment? Environmental and Resource Economics, 21(1), 1-22.

Zarsky, L. (1999). Havens, halos and spaghetti: untangling the evidence about foreign direct investment and the environment. Foreign direct Investment and the Environment, 13(8), 47-74.