REVEALING THE ENVIRONMENTAL COST OF GLOBALIZATION: AN EMPIRICAL ANALYSIS ON TRADE OPENNESS, FDI, AND CO2 EMISSIONS IN THE APEC COUNTRIES

Abstract

Recently, the issue of how trade openness affects environmental degradation has gained importance. The fact that about 60% of the world's total CO2 emissions into the atmosphere are from APEC countries has made the economic activities of these countries a source of concern for the world. Although there have been many studies on the relationship between CO2 emissions and trade openness, there has yet to be a consensus. This study investigates how trade volume affects CO2 emissions in APEC countries, which account for a significant share of international trade volume and CO2 emissions. In addition, the empirical model of this research also investigates EKC. The panel data analysis method is used considering the data of APEC countries. According to the results, while trade openness increases CO2 emissions in APEC countries, FDI decreases CO2 emissions. Finally, EKC is valid in APEC countries from 1990 to 2016.