Analyzing determinants of CO2 emissions in ASEAN: Evidence from panel regression and threshold model

Abstract

Climate change caused by greenhouse gas emissions, especially CO₂, is one of the most pressing global issues. Southeast Asia is particularly vulnerable to the impacts of climate change, such as sea level rise, extreme weather events, and changes in rainfall patterns. This study investigates the key factors influencing carbon dioxide (CO₂) emissions across the 10 member states of the Association of Southeast Asian Nations (ASEAN). Panel data regression models are utilized to examine the impacts of economic growth, urbanization, industrialization, and other variables on CO₂ emissions. A fixed effects model finds that GDP has a negative relationship with CO₂, while urbanization and industrialization have positive effects. A panel threshold model further reveals GDP’s impact on emissions changes at a threshold. Below this level, GDP decreases CO₂; above the threshold, emissions still decline with GDP growth, but at a slower rate. The results suggest that while ASEAN has pursued economic growth, this has not necessarily led to proportional increases in CO₂. However, industrialization and urbanization are critical factors associated with rising emissions. The study recommends policy implications, including sustainable urban planning, industrial waste management, and green investment incentives.