ARE ASIAN COUNTRIES BECOMING POLLUTION HAVENS FOR SINGAPORE'S POLLUTION INTENSIVE INDUSTRIES?

Abstract

The pressing concern for the fight against climate change and global warming has been strong in recent years. In the midst of gaining economic growth, countries often compromise their environment by setting lower environmental regulations to attract investors. This phenomenon which industries relocate to countries with laxer regulations is named Pollution Haven Hypothesis. This study seeks to examine whether this phenomenon truly exists by using Singapore as a source country. This study, in the best of the author‘s knowledge, is the first study which seeks to answer whether the achievement of Singapore‘s high environmental quality is due to the exporting of pollution intensive industries out into other Asian Countries. To test for the phenomenon, panel data and time series data were collected. Regression (1) uses Fixed Effects regression model, in which unobserved factors of country characteristics and time are fixed. Regression (1) will seek to determine whether exports into Singapore and foreign direct investments into selected countries affect carbon dioxide emissions. Regression (2) uses Ordinary Least Squared (OLS) model to determine the relationship between imports into Singapore from selected countries on Singapore‘s carbon dioxide emissions. Results from the panel data and the time series showed that the pollution haven hypothesis does not exist in Singapore. Hence, it shows that Asian countries are not becoming pollution havens for Singapore‘s pollution intensive industries. Further studies could be done to enhance these findings.