Evidence of the environmental Kuznets curve for atmospheric pollutant emissions in Southeast Asia and implications for sustainable development: A spatial econometric approach

Southeast Asia has one of the fastest rates of industrialisation and urbanisation in the world. While this has brought economic benefits to the region, it has also resulted in considerable environmental and health impacts associated with air pollution. This study presents the first spatial econometric assessment of the environmental Kuznets curve (EKC) for Southeast Asia. Spatial panels, while important in studies involving geographical units, have, to date, been underutilised in many EKC studies. In this study, the income–pollution trajectories of three air pollutants—nitrogen oxides (NOx), sulphur dioxide (SO2) and fine particulate matter (PM2.5)—are examined through standard and spatial EKC models that regress per capita emissions on several socioeconomic indicators. The econometric assessment utilises data from 1993 to 2012 for nine Southeast Asian countries at varying levels of economic development. An inverted U‐shaped curve is found for all pollutants, thus confirming the existence of an EKC. Spatial spillovers are not found for NOx emissions but are supported for SO2 and PM2.5 emissions. While an EKC is supported, most countries are still on the upward sloping portion of the inverted U‐shaped curve. This highlights the urgent need to establish and enforce effective policies to abate emissions in light of the current extent of health issues associated with ambient air pollution in the region. In particular, results presented here point to policies that increase the share of renewable energy as a potentially effective emissions abatement strategy as policymakers in the region attempt to steer a path towards sustainable development.