Economic Growth, Energy Consumption and Environmental Quality: Evidence from Vietnam

The purpose of this study is to explore the relationship between economic growth, energy consumption and environmental quality in Vietnam from 1995 to 2018 with the Autoregressive Distributed Lag Cointegration (ARDL) approach. The results confirm a long-term equilibrium relationship between CO2 (carbon dioxide) emissions, income, energy consumption, trade openness, and FDI (Foreign Direct Investment). Among those, income positively affects CO2 emissions, but its long-run elasticity is smaller than the short-run one, implying that carbon dioxide emissions decrease as income is on the increase over time. This is similar to the findings of [1] for Cambodia [2] for Turkey, [3] for Jordan, Kuwait, Qatar, South Asian countries, Latin American countries, and [3]-[4] for Viet Nam. In addition, there exists statistical evidence of the impact of energy consumption, trade openness and FDI flows on the level of environmental pollution in Vietnam. From that, the author proposes a few policy implications in protecting the environment and promoting economic growth in Vietnam.