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Environmental Governance and Environmental Performance

Chun-Ping Chang, Minyi Dong and Jiliang Liu
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Chun-Ping Chang: Asian Development Bank Institute
Minyi Dong: Asian Development Bank Institute
Jiliang Liu: Asian Development Bank Institute

No 936, ADBI Working Papers from Asian Development Bank Institute

Abstract: Along with the continuous development of the global economy, environmental deterioration has been widely recognized as a pressing issue nowadays, bringing environmental governance to the forefront of human survival. Asia, the largest continent in world in terms of both landmass size and population, has long been facing the exhaustive challenge of environmental pollution. We empirically prove that the level of environmental governance, proxied by government expenditure on environmental protection as a share of gross domestic product (GDP), exerts significant impacts on environmental conditions among Asian countries. For Asian countries, basically three main conclusions can be drawn that may be useful for improving the condition of environmental quality: (i) the authority should increase the share of government expenditure on environmental protection, since it contributes significantly to the reduction of CO2 emissions and the promotion of energy efficiency; (ii) the government should make an effort to control the overheating economic growth, since excessive economic growth is detrimental to the environment, and increasing GDP per capita leads to increasing CO2 emissions, decreasing energy efficiency, and decreasing comprehensive environmental performance; and (iii) although foreign direct investment has no impact on CO2 emissions and the Environmental Performance Index, it exerts a significantly negative impact on energy intensity and thus promotes an effect on energy efficiency; therefore, we recommend that the government should implement relevant policies to attract more foreign investment.

Keywords: environmental performance; environmental governance; government expenditure (search for similar items in EconPapers)
JEL-codes: H11 Q56 Q58 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019-03-25
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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