The relevance of economic freedom for energy, environment, and economic growth in Asia-Pacific region

This paper investigates the relationship between energy intensity, economic freedom, and carbon emissions. The problem of environmental degradation, economic freedom, and energy use is mainly studied for developed economies; however, this study has selected forty-one Asia-Pacific economies representing all income groups of the World Bank's classification. In the presence of income, economic freedom plays a dual role for environment and energy: direct impact and as moderating factor impact. Here, we empirically test for a panel of 41 Asia-Pacific countries using the autoregressive distributed lag approach. Our findings suggest, although there is no bidirectional causality between all the variables, the long-run estimates of economic freedom for economy and environment are positive. The results imply for substantial structural reforms with a favorable economic and regulatory environment for Asia-Pacific countries. Our empirical analysis also implies that GDP growth levels for Asia-Pacific countries are becoming increasingly dependent on economic freedom and energy intensity. The results underline the critical role played directly and indirectly by economic freedom in creating an atmosphere that promotes research and development activities to help reduce energy intensity shortly to solve environmental problems.

Automated summary

This study investigates the relationship between energy intensity, economic freedom, and carbon emissions in 41 Asia-Pacific economies. The findings suggest that economic freedom has a positive impact on the economy and environment, emphasizing the need for substantial structural reforms in the region. The results also highlight the increasing dependence of GDP growth levels in Asia-Pacific countries on economic freedom and energy intensity.