HOW ENVIRONMENTAL PROTECTION INVESTMENT CONTRIBUTES THE SUSTAINABLE DEVELOPMENT ACROSS THE SELECT ASIAN EMERGING ECONOMIES? A COMPARATIVE VIEW

Abstract

Climate change significantly impacts global sustainable development, especially in emerging and developing economies, where industrialization and urbanization contribute to environmental degradation. Recently, Environmental Protection Investment (EPI) has gained attention as a crucial tool to tackle these issues. Its role is vital in these regions, where economic growth often conflicts with environmental sustainability. This study investigates the contribution of EPI to sustainable development in Asian emerging economies, focusing on both long-term and short-term dynamics. To achieve this, the present study considers yearly data of seven Asian emerging economies, namely China, India, Indonesia, Malaysia, Philippines, Thailand, and Vietnam, from 1995 to 2022 and adopts a Vector Error Correction Model (VECM). Results of the study reveals existence of a cointegrating relationship between EPI and sustainable development in Asian emerging economies. This study highlights that EPI favourably contributes to sustainable development both in the long-run and the short-run across all countries. But in short-run it has less impact over the sustainable development as compared to the long-run. Further, country-wise disparity in terms of the influence of EPI on sustainable development is also found. Results of this study recommends policy makers of Asian emerging economies to put more focus on EPI at the time of framing different policies so that countries can minimize the pressure on mother nature arise due to economic activities and can move faster towards achieving different Sustainable Development Goals (SDGs) by 2030.