Causal relationship between globalization, economic growth and CO2 emissions in Vietnam using Wavelet analysis

Abstract

In connection with environmental degradation in Vietnam, known as an emerging economy, very limited studies have been implemented to demonstrate the environmental aspects of the country's core policies, as well as recent economic policies such as economic growth and globalization policies. Given this driving force, this paper uncovers a novel perspective on the causal associations between CO2 emissions, economic growth, and globalization in Vietnam using wavelet analysis. The empirical results provide evidence of the interconnections between the selected indicators through time and frequency. More accurately, the findings uncover that economic growth and globalization significantly increase carbon dioxide emissions in Vietnam in the medium and long run. These outcomes highlight the importance of policymakers properly coordinating policies to address Vietnam's severe environmental degradation. Furthermore, Vietnam should continue relevant policy reforms such as encouraging investment, allowing for effective governance and promoting human capital accumulation.