Growth and environmental quality in Singapore: Is there any trade-off?

With a view to provide new evidence in favor of EKC hypothesis that claims a trade-off between growth and environmental quality at least in the short-run, we conduct a study for Singapore by analyzing the data on CO2 emissions, energy consumption (measured by two proxies) and per capita GDP for 1975–2011 by means of cointegration and causality techniques. The results indicate a significant rise in CO2 emissions as GDP rose over the years confirming a short-run trade-off between environment and growth. Further analysis on a possible turning point shows that continuous growth will be necessary for a long time before we experience any trickle-down effects on environmental pollution. The results of causality analysis indicate that CO2 emissions indeed have caused decline in Singaporeʹs growth. It is therefore argued that strict regulatory regimes on environmental protection in the city–state must remain in force.