Analyzing the environmental impact of the automobile industry in ASEAN nations

Abstract

Aligned with Sustainable Development Goal 13, this study addresses rising carbon dioxide (CO2) emissions linked to the automobile industry’s expansion in ASEAN nations. Despite the automobile industry’s economic significance in ASEAN, its environmental implications have received limited attention. This study investigates the effects of economic growth, foreign direct investment (FDI), population growth, and vehicle production on CO2 emissions across Vietnam, the Philippines, Indonesia, Malaysia, and Thailand from 1999 to 2022. Using the IPAT model as the conceptual framework, the analysis applies Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, and the Panel ARDL approach to ensure robust estimation and examine long-run relationships. Findings reveal that economic growth, vehicle production, and FDI significantly drive CO2 emissions, while population growth shows a weaker effect. These results highlight the environmental cost of industrial and economic activities in the region. Policy recommendations urge ASEAN countries to promote sustain able transportation, invest in green technology, and regulate vehicle production to better align economic development with climate goals. The study acknowledges limitations, including the exclusion of renewable energy adoption and environmental regulation indices, and notes that findings may not be fully generalizable beyond ASEAN nations. Future research should expand the model to include broader environmental factors and conduct cross-regional comparisons. This study introduces vehicle production as a novel proxy to assess transportation-induced emissions, alongside economic growth, FDI, and population growth. The findings contribute insights to help ASEAN economies align industrial expansion with sustainability goals.