MANAGING CARBON EMISSIONS AND AIR POLLUTION FOR HUMAN DEVELOPMENT: SPATIAL EVIDENCE FROM DEVELOPING ECONOMIES

Abstract

Increasing carbon dioxide and air pollution emitted by human activities are the two greatest impediments to human development worldwide, particularly in developing economies. This study examines the spatial effects of CO₂ emissions and air pollution on human development index in 112 developing nations. Consequently, the spatial econometric models of global and local Moran's I, spatial Durbin model, and geographically weighted regression are utilised in this study. The results revealed significant spatial associations in terms of CO₂ emissions, air pollution, and HDI. The empirical findings of SDM indicate that CO₂ emissions have a positive local and spillover effects on HDI, whereas air pollution has a negative local and spillover effects on HDI. In addition, GWR analysis revealed that the coefficient magnitude of CO₂ emissions and air pollution differs between developing nations. The positive effect of CO₂ emissions is found to be highly sensitive in South American and African developing economies, while the negative effect of air pollution is found to be highly sensitive in a number of Asian and African developing nations. Based on these findings, this study provides policy recommendations to governments in order to reduce CO₂ emissions and air pollution to improve HDI by prioritising the most vulnerable areas.