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Environmental Governance and Environmental Performance

Publication | March 2019
Environmental Governance and Environmental Performance

Environmental deterioration has been widely recognized as a pressing issue, bringing environmental governance to the forefront of human survival.

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.

WORKING PAPER NO: 936