Exploring the Relationship Between Industrialization, Electricity Consumption, and Carbon Emissions Across 35 Asian Countries: A Panel Quantile ARDL Approach

Abstract

This study investigates the long- and short-run relationships between industrialization, electricity consumption, and CO2 emissions with the aim of environmental sustainability and economic development. The study uses data from the World Development Indicator (WDI) across 35 Asian countries spanning from 1990 to 2022. We employ a panel quantile ARDL model to estimate effects at different quantiles of the conditional distribution, thereby avoiding the limitations of mean regression. The quantile regression technique examines how the economy, the environment, financial, and trade concerns interact at each quantile. Our findings suggest that the variables exhibit co-integration in the long-run relationship. We find that financial development adds to energy pollutants. Electricity consumption leads to CO2 emissions. Trade openness also has a positive impact on energy pollutants. The results further suggest that electricity consumption plays a substantial role in CO2 emissions, particularly in regions experiencing rapid industrial growth. This study offers valuable insights for policymakers striving to balance economic growth and environmental sustainability in the context of industrialization.