Analysis of pollution haven hypothesis (PHH) and environmental Kuznets curve (EKC) in selected Association of South-East Asian Nations (ASEAN) countries

Abstract

The Pollution Haven Hypothesis (PHH) claims that following the international trade, developing countries tend to specialize and export pollution-intensive goods to advanced countries.  The current study examines the PHH claim in the context of exports of the six major ASEAN countries to Japan in the Environmental Kuznets Curve (EKC) framework for the period 1989-2017. The Fully Modified Ordinary Least Square (FMOLOS) panel co-integration approach has been employed to estimate the coefficients of the EKC model. The results reveal that the EKC does exist while the exports of pollution-intensive goods from the ASEAN to Japan increase the CO2 emission. The study concludes that world pollution cannot be curtailed unless advanced countries reduce the consumption of pollution-intensive goods. Therefore, an integrated well-devised global program is imperative to tackle the alarming issue of global warming, and advanced countries should lead this program.