Offshore Economic Activities and Environmental Quality: Nexus among Economic Growth (GDP), Foreign Direct Investment (FDI), Trade Openness, Energy Consumption and Carbon (CO2) Dioxide Emission

The abstract is organized in as a rundown of different abstracts from different articles written by the author as they connect to the variables mentioned in the topic of this thesis. The first study explores the triangular nexus among Foreign Direct Investment (FDI), international tourism, and energy use in determining the environmental quality in China. Emphasis is laid on the triangular nexus among the tourism arrivals (TA), Foreign Direct Investment (FDI) energy use (EU) and (𝐶����𝑂����2) pollution/emissions which portrays how the interwoven relationship that exit among the chosen variables and tailored towards impacting the economic growth GDP) of China which in turn impact on the environmental quality of the country. The author’s intention of investigating the triangular nexus among the choice variables is to provide answers to the questions raised at the conception of this idea, thus: Is there really an association among the FDI and CO2 emissions through energy consumption? Is there a transmission among the GDP, FDI and carbo dioxide emission? Is there connecting factor between the GDP and carbon dioxide? The findings are: economic growth (GDP) has a positive relationship with both tourism arrivals, energy use, FDI and 𝐶����𝑂����2.This contributes to heavy 𝐶����𝑂����2 emissions which the author classified as the outsourced/offshore 𝐶����𝑂����2emissions in China FDI. Tourism arrivals have a bidirectional (feedback) causal relationship with energy use, and a uni-directional causal relationship with 𝐶����𝑂����2(transmitting from tourism to 𝐶����𝑂����2). Both FDI and energy use have bi-directional (feedback) causal relationship, 𝐶����𝑂����2, energy use and tourism arrivals have a unidirectional relationship with GDP which established the triangular nexus among causality among the variables and impact on the GDP. The second study investigates the interacting force between Carbon emission and offshore intensive activities and was tagged a fresh evidence for China. The study displayed nexus among the offshore economic activities, the economic growth (GDP), energy use and CO2 emissions for a clear picture of the relationship among them. The study incorporated the Foreign Direct Investment (FDI) and Tourism Arrivals (TA) to account for the offshore effects. The study employed the converted Chinese annual data to quarterly data that covers the period of 1995Q1 -2016Q4 because of unavailability of Tourism data, and was estimated with ARDL and Granger causality approaches for both short and long run effects. The findings are: CO2 emissions have a positive relationship with both energy use, FDI and GDP. This contributes to heavy CO2 emissions which the author classified as the outsourced CO2 emissions in China FDI. Tourism arrivals have a bi-directional (feedback) causal relationship with energy use, and a uni-directional causal relationship with CO2(transmitting from tourism to CO2 emissions). Both FDI, energy use, CO2 emissions and tourism arrivals have a unidirectional relationship with GDP which established the triangular nexus among causality among the variables and impact on the GDP. The third study investigates and report clearly the environmental implication of offshore economic activities by linking amongst the economic growth, energy use and environment (CO2) in a cointegrated and causality manner. We tried to find out if the effect of the carbon emission is positive to the performance of the Indonesian economic growth with an eye on the energy intensity via offshore (FDI and Openness) economic and industrial activities in the economy. The findings are: 1. The ARDL long run (elasticity) of economic growth is significantly positive associated with carbon emissions. But this finding changed in the lag 1 & 2 with negative and significant relationship between GDP and CO2 emissions. 2. Positively significant relationship between economic growth and energy use (as expected). 3. Negative and significant relationship is found between openness and economic growth but positive and significant relationship was observed between openness and growth in the 1st and 2nd lag. 4. A negative but not significant relationship between economic growth and Foreign Direct Investment, inflow in the short-run, while in the long-run, the relationship became significantly positive; 5. A unidirectional causation is found passing to Foreign Direct Investment (FDI) from economic growth (GDP) at 5%, significant level; 6. Uni-directional transmission passing from energy to openness, CO2 emissions, and from FDI to CO2 emissions, while there is a feedback causation between openness and CO2 emissions. The findings of this study have implication to the environmental quality of Indonesia via economic growth, hence, the higher and better the economic growth of the country the lesser the carbon emissions and the better the environmental quality. This support the pollution halo hypothesis, where FDI enhance economic growth which impact energy consumption and reduce carbon emission in the host country. Keywords: Carbon dioxide (𝐶����𝑂����2) emissions, Energy use, Foreign Direct Investment, Trade openness, Tourism arrivals, Offshore activities, Economic growth, China, Indonesia.