Global CO2 Emission Reduction Disparities After and Before COVID-19

Thapa-Parajuli, Resham; Neupane, Rupesh; Timsina, Maya; Pokharel, Bibek; Poudel, Deepa; Maharjan, Milan; KC, Saman Prakash; Shrestha, Suprit

doi:10.3390/su17146602

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Open AccessArticle

Global CO₂ Emission Reduction Disparities After and Before COVID-19

by

Resham Thapa-Parajuli

^1,*

,

Rupesh Neupane

¹,

Maya Timsina

²,

Bibek Pokharel

¹,

Deepa Poudel

¹

,

Milan Maharjan

¹,

Saman Prakash KC

¹ and

Suprit Shrestha

¹

Central Department of Economics, Tribhuvan University, Kirtipur 44613, Nepal

²

Center for Public Policy, Governance and Anti-Corruption Studies, Tribhuvan University, Kirtipur 44613, Nepal

^*

Author to whom correspondence should be addressed.

Sustainability 2025, 17(14), 6602; https://doi.org/10.3390/su17146602 (registering DOI)

Submission received: 10 March 2025 / Revised: 18 June 2025 / Accepted: 2 July 2025 / Published: 19 July 2025

(This article belongs to the Special Issue Optimising Air Quality and Health Benefits of Transport Decarbonisation)

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Abstract

The relationship between economic progress and environmental quality remains a central focus in global sustainability discourse. This study examines the link between per capita economic growth and CO₂ emissions across 128 countries from 1996 to 2022, controlling for energy consumption, trade volume, and foreign direct investment (FDI) inflows. It also evaluates the role of governance quality—measured by regulatory quality and its volatility—while considering the globalization index as a confounding factor influencing CO₂ emissions. We test the Environmental Kuznets Curve (EKC) hypothesis, which suggests that emissions initially rise with income but decline after reaching a certain economic threshold. Our findings confirm the global presence of the EKC. The analysis further shows that trade openness, governance, and globalization significantly influence FDI inflows, with FDI, in turn, reinforcing institutional quality through improved governance and globalization indicators. However, in countries with weaker governance and regulatory frameworks, FDI tends to promote pollution-intensive industrial growth, lending support to aspects of the Pollution Haven Hypothesis (PHH). We find a significant departure in EKC explained by post-COVID governance and globalization compromises, which induced the environment towards the PHH phenomenon. These results highlight the need for context-specific policy measures that align economic development with environmental constraints.

Keywords: Environmental Kuznets Curve; CO₂ emissions; economic growth

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MDPI and ACS Style

Thapa-Parajuli, R.; Neupane, R.; Timsina, M.; Pokharel, B.; Poudel, D.; Maharjan, M.; KC, S.P.; Shrestha, S. Global CO₂ Emission Reduction Disparities After and Before COVID-19. Sustainability 2025, 17, 6602. https://doi.org/10.3390/su17146602

AMA Style

Thapa-Parajuli R, Neupane R, Timsina M, Pokharel B, Poudel D, Maharjan M, KC SP, Shrestha S. Global CO₂ Emission Reduction Disparities After and Before COVID-19. Sustainability. 2025; 17(14):6602. https://doi.org/10.3390/su17146602

Chicago/Turabian Style

Thapa-Parajuli, Resham, Rupesh Neupane, Maya Timsina, Bibek Pokharel, Deepa Poudel, Milan Maharjan, Saman Prakash KC, and Suprit Shrestha. 2025. "Global CO₂ Emission Reduction Disparities After and Before COVID-19" Sustainability 17, no. 14: 6602. https://doi.org/10.3390/su17146602

APA Style

Thapa-Parajuli, R., Neupane, R., Timsina, M., Pokharel, B., Poudel, D., Maharjan, M., KC, S. P., & Shrestha, S. (2025). Global CO₂ Emission Reduction Disparities After and Before COVID-19. Sustainability, 17(14), 6602. https://doi.org/10.3390/su17146602

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Global CO₂ Emission Reduction Disparities After and Before COVID-19

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