ASEAN Economy: A Study of Climate Change and Foreign Trade

Abstract

The present study aims to examine the causal impact of foreign trade of ASEAN economies on climate change. The study based on secondary data covers 20 yearsi.e 2000-2020. In this study,the Ordinary Least Square(OLS) method has been used. The study used CO₂ and the efficiency of energy used as indicators for climate change. The economic variables used in the study are GDP, FDI, Export, Import, Exchange rate, Inflation, and population. The empirical findings show thatthere is a significant impact on GDP, FDI on climate change while export and import have a negative impact on the efficiency of energy used in ASEAN economies. The result suggests that the positive association of imports and CO₂is caused by the comparative cost advantage of products by the host country as compared to another country. Moreover, it is important to use more export environmentally friendly power to maintain a healthy climate.