Environmental sustainability under the impact of globalization and human capital: Evidence from ASEAN countries

CO2 emissions have been identified as the primary driver of threats to global environmental sustainability. This study addresses the pressing issue of rising emissions in ASEAN member countries. While issues related to climate change and global warming have been of continued interest to researchers, few previous studies have specifically addressed carbon emissions in ASEAN countries. This paper examines the impacts of various aspects of globalization (including trade openness and foreign direct investment) human capital, and two control variables (gross domestic product and institutional quality) on sustainable development (CO2 reduction) in the period of 2000--2022. The study examines the stationarity and co-integration relationships between the mentioned indicators in the short-term through technical methods, including cross-sectional unit root tests and Westerlund cointegration. The feasible generalized least squares (FGLS) model was used to assess the impact of selected independences variables on the amount of CO2 emission. Notably, the results highlight that institutional quality and gross domestic product do not affect the amount of CO2 emissions into the environment, implying the absence of a reverse U-shaped effect or a relationship between gross domestic product and CO2 emissions following the Kuznets curve theory at five percent level. The remaining variables including trade openness, foreign direct investment, and human capital contribute to the increase in CO2 emissions in the short-term. In which, human capital is the biggest impact factor with a coefficient of 10.84224., while the effect of other variables is very small. These findings aim to strengthen, complement, and develop strategies to mitigate environmental degradation in the short-term in the aforementioned countries.