Economic growth and environmental pollution in Myanmar: an analysis of environmental Kuznets curve

Abstract

This empirical study examines the short- and long-run relationship between GDP as an economic growth indicator and CO₂ emissions as an environmental pollution indicator in Myanmar by using annual time series data over the period of 1970-2014. It also carefully considered other proxies, such as trade openness, financial openness and urbanization, and structural breaks in the country. The fundamental objective of this study is to test the validity of environmental Kuznets curve (EKC) in the context of Myanmar. The dynamic estimates of the long- and short-term relationship among greenhouse gases (CO₂, CH₄, N₂O), GDP, trade intensity, financial openness, and urbanization growth are built through an autoregressive distributed lag (ARDL) model. The empirical findings indicate that there is positive short- and long-run relationship between CO₂ and GDP and thus, no evidence of EKC hypothesis is found for CO₂ in Myanmar. Nevertheless, the existence of the EKC is observed for CH₄ and N₂O. On the other hand, trade and financial openness have inverse relationship with CO₂ emissions. These results demonstrate that trade liberalization and financial openness will improve the environment quality in Myanmar in the long run.

Keywords: ARDL approach; EKC; Financial openness; GHG emissions; Myanmar; Trade openness; Urbanization.