Driving factors of CO2 emission reduction in the logistics industry: an assessment of the RCEP and SAARC economies

As a strategic pillar of the Asian economic trade partnership, the logistics industry is a source of significant industrial relevance and specifically targeted CO2 emission initiatives. Therefore, in order to address the potential environmental risks that are associated with existing Asian free trade agreements and achieve global mitigation targets, it is imperative that one evaluates both the performance of the logistic sector and the factors that drive carbon emissions. As such, our research analyses 16 countries both the Regional Comprehensive Economic Partnership, from one of the largest emerging global trade partnerships in Asia, and the South Asian Association for Regional Cooperation. The results of which act as an important guide in how the green logistic service sector can be driven in emerging economies. In order to conduct this analysis, a balanced panel dataset from 2007 to 2018 is employed and estimated using Generalized Least Square and the Generalized Method of Moments regression approaches, with the issues of cross-sectional dependence, unit-root, stationarity, and cointegration also checked. The results revealed that economic growth, foreign direct investment inflows, and international trade positively affect logistics performance. In addition, improved logistics services, a hassle-free customs clearance process, and the frequency of shipments reduce transport CO2 emissions by 0.177%, 0.026%, and 0.014%, respectively. These findings suggest that renewable energy sources may alleviate the detrimental impact of logistics services on low-carbon transportation and spur economic action with substantial international trade opportunities available. This study hypothetically proposes and verifies a new dimension for two variables: international trade (export-import goods) and transport CO2 emissions. The lessons drawn from the study assist policymakers and stakeholders in rethinking the roles of green logistics infrastructure in the future.