Evaluating the Relationship between Freight Transport, Economic Prosperity, Urbanization, and CO2 Emissions: Evidence from Hong Kong, Singapore, and South Korea

Abstract

This paper analyzes the relationship between freight transport, economic prosperity, carbon dioxide (CO2) emissions, energy consumption, and urbanization for three top Asian economies, namely, Hong Kong, Singapore, and South Korea during 1995–2017. For this purpose, we use the augmented Dickey-Fuller test for the stationary of the series, Johansen co-integration approach, and fully modified ordinary least squares and Granger causality model to infer the causal relationship between the study variables. The results show that economic prosperity (GDP) and energy consumption (EC) have a significant impact on freight transport (FT) for all three economies. In addition, the results also manifest the existence of bidirectional causality between GDP and FT in Singapore but a unidirectional causality running from GDP to FT in the case of Hong Kong and South Korea. As a quick policy option, controlling fossil fuel energy consumption in the transport sector may result in a remarkable reduction in CO2 emissions. The present study provides new insights to decision-makers for designing comprehensive energy and environmental policies for future sustainable freight transport growth in the long run.