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The impact of energy consumption to environmental sustainability: an extension of foreign direct investment induce pollution in Vietnam

Tehreem Fatima (Asian Demographic Research Institute, Shanghai University, Shanghai China)
Muhammad Saeed Meo (Superior University, Lahore, Pakistan and Lab for Gas, Technology and Sustainable Development – RUDN University, Moscow, Russia)
Festus Victor Bekun (Economics and Administration Sciences, İstanbul Gelişim Üniversitesi, Istanbul, Turkey)
Tella Oluwatoba Ibrahim (University of Ilorin, Ilorin, Nigeria)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 15 July 2021

Issue publication date: 2 November 2021

215

Abstract

Purpose

According to the crusade of the United Nations sustainable development goals (SDGs-6, 7,8,12 and 13) that addressed pertinent issues around, clean access to water, access to energy, responsible consumption and climate change mitigation alongside, respectively, Paris Kyoto Protocol agreement of mitigation of climate changes issues of vision 2030.

Design/methodology/approach

This purpose of this study aimed to assess the Environmental Kuznets Curve hypothesis following the ecological footprint perspective with a data set covering the period 1995–2018. It is well-established that anthropogenic human activities are the root cause of environmental deterioration. To this end, the current study is fitted in a multivariate framework to ameliorate for omitted variable bias for the data set from 1995–2018 on a quarterly frequency using autoregressive distributive lag methodology. Subsequently, the stationarity status of the study underlines series were examined with a conventional unit root test and the Pesaran’s bounds test for cointegration analysis.

Findings

Empirical evidence from the bounds test to cointegration traces the co-integration relationship between ecological footprint, conventional energy use, foreign direct investment, international tourism arrival and water resources over the sampled period. The study, in the long run, affirms the N-shaped relationship between ecological footprint and foreign direct investment in Vietnam. Additionally, the present study validates the hypothesis of energy consumption-induced pollution emissions. The relationship between international tourism arrival and quality of the environment is statistically positive in both the short-run and long-run, as 1% in international tourism arrival worsens the quality of the environment by 0.45% and 0.4% in the short-run and long-run, respectively. Interestingly, water resource's major environmental issues that have plagued the Vietnam economy are inversely related to ecological footprint. Based on findings, Vietnamese policymakers may need to consider drafting appropriate environmental policies to tackle global warming while concurrently boosting economic development.

Originality/value

The present study focuses on Vietnam on the determinant of environmental quality measured by a broader indicator (ecological footprint). It is well-established that anthropogenic human activities are the root cause of environmental deterioration. The present study claims to distinct from previous literature in two-folds, namely, in terms of scope. Vietnam holds a very interesting energy mix and environmental dynamics, which has been ignored in the literature. Second, we argue to be the first based on our survey to explore the theme by incorporation of water resources and foreign direct investment intensification in the conventional pollution determinant model. This is in a bid to highlights the policy blueprint for the country (Vietnam), which is currently plagued with high pollution issues and the region at large.

Keywords

Acknowledgements

This study was financially supported by the Major Program of the National Social Science Fund of China (Grant no. 16ZDA088). Muhammad Saeed Meo also acknowledged that study has been supported by the RUDN University Strategic Academic Leadership Program.

Ethical Approval: We verify that we have followed all the ethical standards for the publication.

Consent to Participate: Not applicable.

Consent to Publish: We are all agree to get publish.

Competing Interests: There is no conflicts of interest among the authors.

Availability of data and materials: Data will be available upon the request to corresponding author.

Citation

Fatima, T., Saeed Meo, M., Bekun, F.V. and Ibrahim, T.O. (2021), "The impact of energy consumption to environmental sustainability: an extension of foreign direct investment induce pollution in Vietnam", International Journal of Energy Sector Management, Vol. 15 No. 6, pp. 1144-1162. https://doi.org/10.1108/IJESM-01-2021-0001

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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