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Urbanisation in Asia: finding economic and environmental sustainability

Can the economy and environment be friends in rapidly-growing Asia? Deakin Business School (DBS) research provides policy-relevant findings.

When a developing country undergoes rapid urbanisation – thanks to mass migration in search of city opportunities and employment – the knock-on effects are not always pretty: inadequate infrastructure, overcrowding, rising pollution levels and declining quality of life.

With the higher consumption of energy, resources, food, water, land and commodities, urbanisation can pack a heavy environmental and health punch on emerging economies.

But recent research from DBS on urbanisation and pollutant emissions in Asian developing countries has revealed an interesting tipping point: when a country reaches a certain level of economic growth – or a threshold of affluence – emissions begin to decline.

These findings, says DBS researcher Dr Shuddha Rafiq, have deep policy implications because they point to the potential of economic development co-existing with environmental responsibility.

Dr Rafiq is a Senior Lecturer in the Department of Economics and his major research agenda is identifying ways for greater sustainability, especially in the context of emerging economies.

His 2019 paper Does urbanization increase pollutant emission and energy intensity? Evidence from some Asian developing economies investigates the effects of urbanisation on pollutant emissions through the lens of non-renewable and renewable energy consumption, trade and economic growth.

‘Asian emerging economies are being urbanised in an unprecedented rate and a United Nations report reveals that approximately 54% of the world’s population lives in urban areas, a rate that is projected to increase to 66% by 2050,’ says Dr Rafiq.

‘The growth of urbanisation in Africa and Asia is much faster than in other regions … in parallel to this rapid urbanisation, these same emerging economies are experiencing substantial growth in pollutant’s emissions. This study looks at selected Asian developing countries from 1980–2010 and it’s one of a few studies around this core theme.’

While other research has focused on either developed countries or emerging economies, none has specifically examined rapidly-growing, urbanising Asian developing countries and very few have incorporated trade openness into their investigations.

One of the key findings of the Dr Rafiq’s research was that trade openness and affluence help reduce pollutant emissions.

‘The main reasons for CO2 emissions in emerging countries are urbanisation, population and the consumption of non-renewable energy,’ he explains.

‘But we found that as these countries become more affluent and open themselves to trade, they implement more environmentally-friendly practices and technologies. With more wealth, they can afford a cleaner way of life both in terms of environmentally-friendly consumption and production processes.’

It’s this kind of research and data that provides governments with the information they need to make decisions for a healthy economy and a healthy environment.

‘The outcomes of our research provide strong support for policy implementations. We know that reductions in energy use and pollutant emissions will be possible – along with urbanisation – if governments of these countries undertake certain measures,’ says Dr Rafiq.

These measures, he suggests, include the support of renewable energy development, construction of renewable energy production and supply infrastructure, development of a highly energy-efficient and emissions reducing industrial base, and a liberal trade regime for clean technology transfer from developed countries.

‘There also needs to be policies that promote urbanisation with a low carbon urban infrastructure, and transportation systems that will achieve sustainable growth,’ he adds.

As an economics’ researcher, Dr Rafiq has produced substantial work around the issues of human capital, institutionalisation and the consequences of emission reduction schemes on human health and migration.

He says the paper’s findings are significant because they demonstrate that affluence and environmental sustainability are not contradictory.

‘Renewable energy consumption, cautious and planned urbanisation programs, and liberal trading regimes are viable options for sustainable growth in developing Asian economies. This is important research because it identifies a channel through which governments can achieve two out of three bottom lines of sustainability. It is an investment in education that can achieve both economic and environmental sustainability.’