Macroeconomic Variables and Its Impact on CO2Emissions: An Empirical Study on Selected ASEAN Economic Community (AEC) Countries

Abstract

Environmental issues are a crucial aspect in promoting sustainable economic growth. Specifically, CO2gas emission is an environmental-economic phenomenon that needs to be concerned for all parties to maintain a balance between economic growth and environmental sustainability to realize sustainable economic development. This study aims to analyze the social and economic factors that affect CO2gas emissions in selected ASEAN economic community (AEC) member countries. The research used panel data analysis from 2010 to 2019 on selected ASEAN economic community (AEC) member countries: Indonesia, Malaysia, Singapore, Thailand, Laos, Vietnam, Cambodia, Brunei Darussalam, and the Philippines. The research variables consisted of CO2gas emissions as the dependent variable and economic growth (GDP), population (POP), energy consumption (EC), external debt (ED), foreign direct investment (FDI), inflation (INF), and exports (X) as independent variables. The results showed that the variables of economic growth (GDP), population (POP), energy consumption, and exports had a positive and significant effect on CO2gas emissions. Meanwhile, the variables of foreign debt, foreign direct investment (FDI), and inflation did not affect CO2gas emissions in ASEAN economic community (AEC) member countries. This research concludes that it is necessary to carry out an integrated policy to reduce CO2gas emissions by implementing sustainable development strategies involving related parties, providing incentives to reduce fossil energy consumption, and replacing it with environmentally friendly new, renewable energy. The novelty of this research is to analyze the social and economic factors affecting CO2emissions in ASEAN economic community (AEC).