(The) impact of foreign direct investments on clean energy consumption, carbon emissions and economic growth in Central Asian countries

Abstract

Since the fall of the former Soviet Union most Central Asian republics have attracted significant amount of foreign direct investments (FDI) to promote economic growth. I argue that as FDI inflows increase, unavoidably economic growth, energy usage and carbon emissions grow as well. Therefore, this thesis uses generally accepted statistical mechanisms to measure the impact of FDI on the Central Asian economies, and it investigates the contribution of FDI to usage of clean energy, carbon emissions and economic growth. Empirical findings suggest that there exist positive relationships between FDI and economic growth, and economic growth and carbon emissions as well. FDI inflows has no impact on carbon emissions and clean energy use. This paper concludes that if policy makers undertake implementation of energy-efficient investment mechanisms to attract FDI net inflows through providing fiscal schemes and incentives, both economy and environment will benefit.