The study explored the relationship between economic growth and environmental quality by focusing on finding the relationship between CO2 and factors that can affect economic growth especially GDP.
Our empirical exercise indicated that economic growth and environmental quality have a positive relationship (positive sign of LnGDP) but at diminishing rate (negative sign of ) and their relationship has a reverse – U shape. At the low level of GDP, the growth in GDP will cause more emission but when the GDP is at its high level, CO2 emission will be decreased due to the increase of GDP.
In conclusion, the economic growth will help to reduce the CO2 if it reaches the high level of development.
5.2. Policy recommendations
Here we can have some policy recommendations to improve the relationship between economic growth and environmental quality.
I think education is always the best first choice. Educating the citizens about the importance of protecting the environment so that all the next policies will be preceded smoothly and successfully. We can start from educating young people who are more willing to listen and change for a better future, telling them how important it is to take action to protect the environment beside working to make the country wealthier, teaching them how to limit the pollution while doing globalization and encouraging them to devote on that.
An other solution that can be applied is that the developing countries will help the developing ones by providing and transferring high technology via FDI or ODA. Technology plays a key role in promoting sustainability in many areas, low carbon low emission clean energy technologies can help significantly reduce
energy use. But developing countries, especially the least developed countries, face a range of challenges in obtaining, adapting and effectively using technologies for sustainable development, not to mention in building productive capacity. To protect the whole world, every country should be a part in the way to the low-carbon economy.
Next, to find the solutions, I believe we also should start finding the problems. So the first problem that we have is about the GDP level. Because GDP and CO2 have a reverse – U shape, they only have a negative relationship when the level of GDP is high which means in a developed economy, the increase of GDP will lead to a decrease of CO2. It‘s a motivation for all the countries to reach that high level of GDP.
But what should the developing countries actually do and when the growth in their GDP makes the CO2 emissions go up? Issuing the policies and regulations about environmental protection to make sure everybody will be responsible for protecting the environment. Besides, issuing policies and regulations on environmental protection and waste treatment from factories and industrial areas is important. The governments should have the policies, management strategies to make sure that the globalization won‘t have much bad effect on environmental quality. Economic development should always be along with a good environment.
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