The impact of import activities on CO2 emissions in the Association of Southeast Asian Nations (ASEAN).

NATIONAL ECONOMICS UNIVERSITY
-------***-------

MAJOR RESEARCH PAPER IN
INTERNATIONAL ECONOMICS
Topic: The impact of import activities on CO2 emissions in the
Association of Southeast Asian Nations (ASEAN).

Instructure: MSc. Tran Hoang Ha
Name: Pham Quang Vu
Student ID Number: 11207480
Major: International Economics
Class: International Economics 62B

Hanoi, 2023


DECLARATIONS
The author of the research topic "The impact of import activities on
CO2 emissions in the Association of Southeast Asian Nations (ASEAN)"
commits the result of this study is the process of studying and researching
throughout one semester. I assure that the data in the study is entirely based on
reality, reliable, and referential. These contents are objectively and honestly
analyzed and processed.
Hanoi, April 2023
St. Pham Quang Vu

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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to MSc. Tran Hoang Ha, who
supervised the development of my primary research paper, for carefully
reviewing my work, identifying my errors, and providing practical solutions to
my problems. I am deeply grateful for the guidance, support, and assistance of
my professors, classmates, my friends at National Economics University and my
family, who have played a crucial role in helping me refine and improve this
paper. Their invaluable feedback and suggestions have greatly contributed to the
quality and depth of my work.
I understand the topic “The impact of import activities on CO2
emissions in the Association of Southeast Asian Nations (ASEAN)” may still
have some limitations and shortcomings. I am eager to receive feedback from the
readers and I remain committed to further refining and enhancing this research.
Thank you!
Hanoi, April 2023
Sincerely,
St. Pham Quang Vu

2


TABLE OF CONTENTS

DECLARATIONS...............................................................................................1
ACKNOWLEDGEMENT..................................................................................2
TABLE OF CONTENTS....................................................................................3
LIST OF ABBREVIATION...............................................................................5
LIST OF TABLES AND FIGURES..................................................................7
INTRODUCTION...............................................................................................8
CHAPTER 1: THEORETICAL FRAMEWORK OF CO2 EMISSIONS
AND IMPORT ACTIVITIES............................................................................9

1.1. Theoretical framework of import activities............................................9
1.1.1. Definition of import..............................................................................9
1.1.2. The role of imports in the economy....................................................13
1.1.3. The factors affecting import activity...................................................14
1.2. Theoretical framework of CO2 emissions.............................................18
1.3. The nexus between import activities and CO2 emissions.....................18
1.4. Theoretical framework of The Association of Southeast
Asian Nations.............................................................21
1.4.1. Definition of The Association of Southeast Asian Nations.................21
1.4.2. Characteristics of The Association of Southeast Asian Nations.........22
CHAPTER 2: SITUATION OF CO2 EMISSIONS AND THE EFFECT OF
IMPORT ACTIVITIES ON CO2 EMISSIONS IN THE ASSOCIATION OF
SOUTHEAST ASIAN NATIONS....................................................................23
2.1. The situation of import activities of the Association of Southeast Asian
Nations............................................................................................................23
2.1.1 The Association of SouthEast Asian Nations Import Overview..........23
2.1.2. Import market structure of the Association of Southeast Asian Nations......27
2.1.3. Opportunities and Threats of Import Activities in the Association of
Southeast Asian Nations...............................................................................30
2.1.4. Import policies of the Association of Southeast Asian Nations..........34

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2.2. The environmental status and the situation of CO2 emissions of the
ASEAN Nations..............................................................................................35
2.2.1. The environmental status in the ASEAN Nations...............................35
2.2.2. The situation of CO2 emissions of the ASEAN Nations....................39
2.3. The effect of import activities on CO2 emissions in the Association of
Southeast Asian Nations................................................................................43

2.4. Policies to adjust import activities of ASEAN nations towards
reducing CO2 emissions................................................................................45
CHAPTER 3: CONCLUSIONS AND RECOMMENDATIONS..................48
3.1. Conclusions..............................................................................................48
3.1.1. Positive impacts of import activities in ASEAN.................................48
3.1.2. Negative impacts of import activities in ASEAN...............................49
3.2. Recommendations...................................................................................50
REFERENCES..................................................................................................52

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LIST OF ABBREVIATION
Abbreviation

Meaning

ADB

Asian Development Bank

AEDP

Alternative Energy Development Plan

AFTA

ASEAN Free Trade Area

AKFTA

ASEAN-Korea Free Trade Area

ASEAN

Association of Southeast Asian Nations

ASEAN-6

ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, Philippines,
Singapore, and Thailand)

ASEP I

ASEAN Regional Environment Program

ATIGA

ASEAN Trade in Goods Agreement

C/O

Certificate of original

CEPT

Common Effective Preferential Tariff

CO2

Carbon Dioxide

COP26

Conference of the Parties

CPTPP

Comprehensive and Progressive Agreement for Trans-Pacific
Partnership

D/O

Delivery Order

EIR

Equipment Interchange Receipt

EU

European Union

FAO

Food and Agriculture Organization

FTA

Free Trade Agreement

GDP

Gross Domestic Product

GHG

Greenhouse Gas

GSO

General Statistical Office of Vietnam

GWP

Global Warming Potential

GWp

Gigawatt peak

IEA

International Energy Agency

MFN

Most-favored Nation

MFW

International Monetary Fund

MWp

Megawatt-peak

NBS

National Bureau of Statistics

NREP
PV

National Renewable Energy Program
Photovoltaic

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Abbreviation

Meaning

RE

Renewable Energy

SEI

Stockholm Environment Institute

TFEC

Total final energy consumption

TIR

Temporary import and re-export

TPP

Trans-Pacific Partnership

TSP

Total Suspended Particles

UNEP

United Nations Environment Programme

VAT

Value Added Tax

VEPR

Vietnam Institute for Economic and Policy Research

WB

World Bank

WCO

World Customs Organization

WHO

World Health Organization

WTO

World Trade Organization

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LIST OF TABLES AND FIGURES

Table 1.1: Influencing mechanisms of import on carbon emissions....................19
Table 2.1: ASEAN Imports of Goods, 2010 - 2019............................................23
Table 2.2: ASEAN Imports of Services, 2010 - 2019.........................................24
Table 2.3: The share of ASEAN goods imports in ten years, 2010 to 2019........25
Table 2.4: The share of ASEAN services imports in ten years, 2010 to 2019.....26
Table 2.5: ASEAN Imports of Goods by Trading Partners, 2010 - 2019............28
Table 2.6: Urban air quality in the ASEAN region.............................................35
Table 2.7: Renewable energy targets by ASEAN country...................................46

Figure 1.1: Development of the Exchange rate EUR/USD..................................16
Figure 2.1: ASEAN Source of Imports of Goods, 2010 and 2019.......................28
Figure 2.2: Top Ten Imports of Goods in ASEAN, 2010 and 2019....................30
Figure 2.3: Forest area, 1990-2020 .....................................................................37
Figure 2.4: Tree cover loss, 2001-2019...............................................................38
Figure 2.5: Climate change adaptation readiness categories in eight ASEAN
countries.............................................................................................................. 39
Figure 2.6: CO2 emission situation of some representative ASEAN countries
from 1971 to 2011...............................................................................................40
Figure 2.7: CO2 emissions per capita in ASEAN, 1970–2006............................41
Figure 2.8a: ASEAN electricity generation mix in 2020.....................................42
Figure 2.8b: ASEAN GHG emissions shares in 2020.........................................43
Figure 2.9: The import value of Vietnam and the ASEAN-6 from 2015 to 2020......44
Figure 2.10: Global greenhouse gas emissions by sector for 2016; total at 49.4
BtCO2.................................................................................................................45

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INTRODUCTION
In the history of human development, there are two major challenges that
people have to confront, which are economic development and environmental
protection. Recently, the environment has become one of the biggest concerns
not only for developed countries but also for developing ones due to the
declining quality of the environment caused by global warming and climate
change (Kasman & Duman, 2015). To be more specific, environmental pollution
can have a long-term impact on future generations (Clayton et al., 2016). The
degradation of the environment is the result of the industrialization process and
economic development. Environmental degradation is a decrease in both the
quality and quantity of natural resources and is reflected in the destruction of

ecosystems, the extinction of flora and fauna, and pollution. To measure the
quality of the environment, one of the most frequently used indicators is the
amount of CO2 emissions.
The Association of Southeast Asian Nations (ASEAN) was established in
1967, comprising 10 member countries: Brunei, Cambodia, Laos, Myanmar,
Malaysia, Indonesia, Philippines, Singapore, Thailand, and Vietnam. ASEAN is
considered as one of the emerging economic centers globally. In fact, ASEAN
countries often have high CO2 emissions per capita, and many cities in these
countries have been included in the list of cities with the highest air pollution
levels worldwide, including Hanoi (Vietnam). These countries also have a high
level of imports. Therefore, ASEAN's global greenhouse gas (GHG) emissions
are estimated to increase by 8% by 2040, doubling that of 2013 (Salman et al.,
2019). This exacerbates environmental issues for ASEAN countries, posing
challenges in seeking appropriate environmental protection solutions for these
nations.
Although there have been numerous studies on the factors affecting CO2
emissions in countries around the world, the number of studies on this topic in
Vietnam is still limited. Additionally, there has been no research on the
differences in the impact of imports on CO2 emissions among the ASEAN
countries.
Therefore, to gain a more comprehensive and in-depth understanding, the
author has chosen the topic: "The impact of import activities on CO2
emissions in the Association of Southeast Asian Nations (ASEAN)". The
author expects that the results of the study will serve as a useful reference for

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researchers studying the impact of imports on CO2 emissions and provide a basis
for proposing appropriate recommendations for the reality of ASEAN countries.

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CHAPTER 1: THEORETICAL FRAMEWORK OF CO2 EMISSIONS
AND IMPORT ACTIVITIES
1.1. Theoretical framework of import activities
1.1.1. Definition of import
1.1.1.1. Definition of import
Import is the process of bringing goods or services from one country into
another for use or sale (Robert C. Feenstra, 2015). A number of previous research
also provide the definition of import. Particularly, Caves (2007) concluded that
import is the flow of goods and services into a country or economic region from
another country or region, which are usually intended for resale or final
consumption. In another study, Tugcu & Topcu (2016) argued that Import is an
integral part of international trade, which involves the exchange of goods and
services across national borders, plays a significant role in promoting economic
growth and development. Imports can be viewed as a way for a country to meet
domestic demand for goods and services that it cannot produce or supply
efficiently domestically (Cline, W.R, 2004).
1.1.1.2. Types of import
Direct import: Direct import is the process of a buyer or importer
purchasing goods directly from a foreign manufacturer or supplier, rather than
through an intermediary or middleman such as a distributor or trading company.
With this approach, enterprises will be entirely proactive in conducting market
research, selecting sales partners, transaction methods, and carrying out
contracts.
Indirect import: Indirect import is a form of importing through
commercial intermediaries, including agents, brokers, distributors, or logistics
service providers. Indirect import helps businesses minimize costs and risks,

increase access to new markets, and establish relationships with reputable sales
partners. However, this form also faces some limitations such as dependence on
intermediaries and a lack of transparency in transactions.
Temporary import and re-export: Temporary import and re-export (TIR)
refer to a type of import that involves the temporary entry of goods into a country
for a specific purpose, such as for display at a trade fair or for repair, and their

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subsequent re-exportation to another country. TIR allows businesses to avoid
paying duties or taxes that would normally be required for permanent imports.
Import joint venture: Import joint venture is a form of cooperation
between businesses from two different countries, in which one party be a
manufacturer or supplier of products, while the other party be an importer and
distributor of products in the local market. This form is commonly used in the
production and consumption of goods with large scale and specific characteristics
of each country (Zhao et al., 1998). Import joint ventures allows partner
companies to share risks, reduce production and transportation costs, and
enhance market access capabilities. However, this form of joint venture also
involves risks, such as differences in culture and management style between
partners, and difficulties in managing intellectual property rights (Lee et al.,
2018).
Import processing: Import processing refers to an import method in which
the importing party (the contractor) imports raw materials from the exporting
party (the manufacturer) to be processed according to the provisions in the
contract between the two parties (Vietnamese Ministry of Industry and trade,
2017).
1.1.1.3. The process of importing
Identifying the products: Identifying the products is the first step in the

import process which involves identifying the products that will be imported.
This includes conducting market research, analyzing the demand for the product
in the target market, and ensuring that the product complies with the regulations
of the importing country (Viswanathan, 2013).
Negotiating the Terms of Trade: The second step in the process of
importing goods is negotiating the Terms of trade with the supplier. This step
involves negotiating the terms of the agreement, including the price, quantity,
quality standards, and delivery schedule. The contract includes the terms of
payment, such as the method of payment, payment schedule, and any penalties
for late payment or breach of contract. Once the contract is finalized and signed
by both parties, it becomes a legally binding document that governs the
importation process.
Checking the Goods Documents in the Import Procedure: In the import
procedure, checking the goods documents is a crucial step to ensure the legality
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and authenticity of the imported goods. According to the World Customs
Organization (WCO), the import goods documents must contain the following
information:
Sale contract: A legal agreement between the seller and buyer of a
particular product or service that outlines the terms and conditions of the sale.
The contract includes details such as the price, quantity, quality, delivery date,
payment terms, warranties, and liabilities of both parties. It serves as a binding
agreement that protects the rights of both the seller and buyer (Jane et al., 2010).
Bill of lading: A document issued by a carrier (a shipping company,
trucking company, or railroad) to acknowledge receipt of goods for shipment. It
is a contract of carriage that serves as a receipt of goods, a document of title to
the goods, and evidence of the terms and conditions of the contract of carriage.
The B/L also contains information about the quantity, description, and

destination of the goods being shipped.
Commercial invoice: A document that provides details of the goods sold
by a seller to a buyer. It includes important information such as the names and
addresses of the buyer and seller, a description of the goods, the quantity, the
price and the terms of sale (Hill et al., 2020). The commercial invoice is used to
calculate the customs duties and taxes on imports, and to ensure that the goods
are properly identified and valued. It is also used by the buyer to confirm the
shipment of goods and to arrange payment for the goods purchased.
Packing list: A document that provides a detailed summary of the contents
of a shipment, including the number and type of items, their weight and
dimensions, and any special markings or handling instructions. It is usually
prepared by the exporter and accompanies the shipment to provide information to
the importer, customs officials, and other parties involved in the transport and
delivery of the goods(Johnson et al., 2010).
C/O: Certificate of origin is a document that certifies the country where
the goods originated from. It is used in international trade to determine the
country of origin of a product, which may affect its duty rates, taxes, and trade
agreements. (Hillman et al., 2016).
Any other relevant permits or licenses
These documents are important to verify the identity and quality of the
imported goods, as well as to comply with legal and regulatory requirements. In
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addition, importers may need to obtain additional certificates or documents based
on the type of goods being imported and the country of origin.
Registering for specialized inspection: Imported goods are often subject to
specialized inspection to ensure they meet quality and safety standards. To
facilitate this process, importers must register for specialized inspection with the
appropriate authorities before the goods arrive in the importing country. Proper

registration for specialized inspection is essential to ensure that the importing
process is completed efficiently and that the goods meet all necessary quality and
safety standards. Failure to register properly may result in delays, penalties, or
even the rejection of the imported goods (Peterson, 2017).
Declaring and transmitting customs declaration: The fifth step is to declare
and transmit the customs declaration for the imported goods. The customs
declaration provides information about the goods being imported, including the
name and description of the goods, their value, the country of origin, and the
identity of the importer. The customs declaration is an important document
because it is used by customs officials to assess the correct amount of duty and
tax to be paid on imported goods.
Obtaining Delivery Order: After completing customs procedures, the
importer must obtain a Delivery Order from the carrier, which allows the
importer or their agent to take delivery of the goods at the port of destination.
The Delivery Order is a document issued by the carrier or their agent and
contains information such as the name and address of the importer, the port of
discharge, the name of the vessel, and the date of discharge. The importer must
present this document to the port authority or terminal operator in order to take
delivery of the goods.
Preparing customs documentation: After the declaration is transmitted, the
system will rely on the content of the declaration to classify the goods into three
main channels:
Green channel: Enterprises only need to prepare the declaration and fulfil
their tax obligations, without any additional procedures or inspections.
Yellow channel: The customs must inspect the documentation of the
shipment.
Red channel: The shipment must be re-inspected by customs.

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Submitting taxes and completing customs procedures: After the
declaration has been transmitted and approved, the enterprise needs to fulfil its
tax obligation. For imported goods, the enterprise needs to pay two main taxes:
import tax and Value Added Tax (VAT). In addition, depending on certain types
of goods with special characteristics, the enterprise may have to pay additional
taxes such as environmental tax and special consumption tax.
Processing the order and transferring goods to the warehouse for
preservation: After completing all customs procedures and tax payments, the
enterprise needs to hire vehicles to pick up the goods and bring them to the
warehouse or port for storage. Then, the representative of the enterprise will
submit documents such as D/O, an introduction letter from the shipper, the
barcode of the customs declaration form, etc. at the port's trade office. Customs
staff then issue an invoice for the necessary fees. The enterprise representative
will pay the fees and receive an Equipment Interchange Receipt (EIR). After that,
the imported goods will be loaded onto the vehicle and transported to the
warehouse for storage.
1.1.2. The role of imports in the economy
In several studies of international economics, imports are often seen as
one of the most important factors that play a role in the economic development of
a country. Research has shown that through importing, countries can utilize
natural resources, convert them into valuable products and services, and bring
income to the economy. In addition, researchers also emphasize the role of
imports in improving the quality of life for citizens, ensuring the supply of goods
and services, and reducing their costs.
David Ricardo (1817) proposed the theory of comparative advantage,
which demonstrates the positive impact of imports on the economy. According to
this theory, when countries specialize in producing goods with a competitive
advantage and import goods that they cannot produce efficiently, the economy
will experience stronger growth. Grossman et al. (1992) argued that imports are

an extremely important factor for the economic development of a country
because they introduce new products and technologies, improve productivity, and
promote economic growth. Imports provide businesses with resources and raw
materials to produce and supply products to consumers at reasonable prices.
Imports also create competition and help improve the quality and efficiency of
production in the economy (Robert C. Feenstra et al., 2002). Imports can impact
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labor productivity, industrial sectoral composition, and prices in the economy
(Ana Margarida Fernandes et al., 2010).
To be specific, a number of other studies have focused on different groups
of countries and have drawn more specific conclusions about the impact of
import activities on the economy. The study “Determinants of the commodity
structure of US Trade” concluded that the cost and quality of imported goods are
important factors in determining the role of imports in the economy. If imported
goods have lower costs and higher quality than domestically produced goods,
then imports will have a positive impact on the economy. A study by Hye et al.
(2015) on the role of imports in the economic growth of developing countries
found that imports have a positive impact on the economic growth of these
countries, particularly in the industrial and service sectors. The main reason is
that imports help enhance production efficiency and expand consumer markets.
1.1.3. The factors affecting import activity
Several factors, such as political, economic, and practical factors can
affect the growth of imports. Exchange rates, competitiveness, growing
globalization, tariffs and trade barriers, transportation costs, languages, cultures,
and various trade agreements affect companies by their decision to import
activities internationally. Political policies and other government concerns, such
as the relationships between trading nations, are highly important to the growth
of international trade. A politically stable nation with few policies restricting

international trade will likely be able to expand its worldwide trade rapidly.
Political instability, however, particularly when it leads to violence, can be a
major barrier to import growth — many nations place steep tariffs on exports or
imports from certain nations or industries for such reasons. While such tariffs can
be used to protect fledgling industries or to place political pressure on some
nations, their overall effect on import activities is often negative. One of the
biggest stories of the past 20 years has been the successful integration of many
developing countries into the global economy and their emergence as key players
in import activities. Improving the quality of institutions would provide
developing countries with a way of ensuring that growth continues (WTO, 2013).
1.1.3.1. Exchange rate
The exchange rate is the price of one currency in terms of another.
Exchange rates fluctuate depending on the demand for a particular currency. If

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there is a high demand for a country's currency, then its price will tend to rise.
Because currencies fluctuate in price it can often be cheaper to buy goods in one
country and sell them in another. Because of this exchange rates have a major
impact on international trade (James, 2014).
World trade has grown rapidly since the breakdown of the Bretton Woods
system of fixed exchange rates in early 1973 (Abrams, 1980). The
implementation of the euro currency should have eliminated a significant part of
the exchange rate of the Slovak subjects. Transactions of about 10 % of GDP are
at exchange rate risk, others are secured naturally. With a euro implementation
volatility against other major currencies (especially against USD) should have
slightly decreased (NBS, 2014).

Figure 1.1: Development of the Exchange rate EUR/USD

Source: Mariana Dubravska & Elena Sira, 2015
Exchange rate volatility determines the overall dynamics of pass-through
effects and associated absorption capability of the exchange rate. The ability of
exchange rates to transmit external (price) shocks to the national economy
represents one of the most discussed areas relating to the current stage of the
monetary integration in the European single market. New European Union (EU)
member countries that accepted the obligation to adopt the euro have to consider
many positive and negative aspects of the euro adoption, especially in the view of
time they need for the implementation of all necessary actions to be ready to give
up their monetary sovereignty. (Mirdala, 2014; Kotulic et al.,2013).
It is evident that exchange rates affect international trade, particularly
import operations. Exchange rate fluctuations can have a substantial impact on a
country's trade balance by affecting the prices of imported goods, which in turn

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can influence the country's economic growth and development. The exchange
rate affects import activities because it impacts the prices of imported goods. If
the exchange rate increases, the price of imported goods will also increase, and
vice versa if the exchange rate decreases, the price of imported goods will
decrease. Thus, the prices of imported goods fluctuate with the exchange rate and
have an impact on the import activities of a country.
However, the impact of the exchange rate on import activities may be
positive or negative, depending on other factors such as competition among
suppliers, the elasticity of demand, and the domestic economy. According to the
study by Goldberg and Knetter (1996), for countries that import a lot, the
elasticity of import activities will decrease if the exchange rate increases, due to
the high prices and reduced consumer investment in imported goods. However, if
suppliers can increase competition and lower prices to attract customers, import

activities may continue to grow.
Another study by Bahmani-Oskooee and Hegerty (2007) also
demonstrates that the impact of exchange rates on import activities depends on
the exchange rate regime (floating or fixed), the level of openness of the
economy, and the degree of dependence on foreign trade of the importing
country. Specifically, in open economies, exchange rates have a positive impact
on import activities, while for closed economies or those heavily dependent on
foreign trade, the impact may be negative.
1.1.3.2. Competitiveness
In the current environment, with growing interdependence between the
markets and in increasing competition, it is more difficult to maintain the current
enterprise market position (Svarova and Vrchota, 2014). Competitiveness refers
to the capacity of distinct nations to offer a variety of products or services, which
is evaluated based on factors such as the level of government regulation,
efficiency, employment costs, and ease of conducting business. Competitiveness
affects international trade, especially import activities because the more
competitive countries will tend to attain a higher level of global trade (Porter,
2011).
Competitiveness affects import activities as it influences a country's
ability to supply competitive products and services with good quality and
competitive prices in the international market. For instance, a country with higher

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productivity, lower labor costs, lower government regulation, and a favorable
business environment has a competitive advantage in its import activities, which
in turn affects the import activities of other countries. However, the impact of
competitiveness on import activities is not always positive or negative but
depends on the economic situation of each country.

A number of studies showed that high competitiveness can lead to product
diversification, competitive prices, and improved product quality, contributing to
the development of the industry and strengthening import activities. However, in
some cases, high competitiveness can lead to low prices and intense competitive
pressure, causing difficulties for businesses in the import process. According to a
study by L. Alan Winters and Neil McCulloch (2004), high competitiveness can
lead to product diversification, competitive pricing, and improved product
quality, thereby contributing to the development of the industry and enhancing
import activities. However, research by Maurice Obstfeld and Kenneth Rogoff
(1996) shows that high competitiveness can lead to low prices and intense
competitive pressure, causing difficulties for businesses in the import process.
Competitiveness in international trade has a significant impact on a
country's import activities. If a country has high productivity and
competitiveness, imported products will be improved in terms of quality and
competitive pricing, contributing to the development of the industry and
enhancing import activities. However, high competitiveness can also create
intense competitive pressure and low prices, especially for businesses involved in
import activities. Therefore, managing competitiveness in international trade is
an important factor to ensure that a country's import activities can contribute
positively to its economic development.
1.1.3.3. Globalization
Globalization is the term used to describe a general tendency for national
economies to become more integrated with each other. This happens because of a
combination of advanced communication technologies, logistic technologies,
increased capital flows and reduction of trade barriers by national governments.
Globalization is a general trend that has caused an increase in international trade
over the last three or four decades (James, 2014).
Globalization has brought many benefits to import activities by improving
the quality and competitive prices of imported products, thereby promoting the

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development of the industry and enhancing import activities. Moreover, it creates
opportunities for import businesses to access new products and helps them
enhance their competitive capacity. However, globalization can also have
negative impacts on import activities. With high levels of competition, import
businesses may face intense price competition, especially when competing with
products from countries with lower production costs. This can create difficulties
for import businesses in terms of growth and development.
According to Baldwin and Evenett's study (2009), the impact of
globalization on import activities can be positive or negative depending on
various factors, including competition and market growth. However, this study
also shows that an increase in trade can put pressure on some local industries and
have negative impacts on the economy. The other studies, such as Bhagwati's
(2004), suggest that globalization can bring significant benefits to developing
countries by providing access to international markets and enhancing competitive
capacity.
Previous studies have shown that globalization can bring benefits to
import activities, but it can also create challenges for businesses involved in
import activities. Therefore, managing competition in international trade is an
important factor in ensuring that import activities contribute positively to the
economic development of a country.
1.2. Theoretical framework of CO2 emissions
CO2 emission is a term used to describe the release of carbon dioxide gas
into the atmosphere, which contributes to climate change and global warming.
According to several credible studies, CO2 emissions are a significant
environmental concern that require immediate action to mitigate their effects.
Carbon dioxide (CO2) is a major agent causing global air temperature increase
and is a greenhouse gas that indirectly affects ozone in the atmosphere

(Valadkhani et al., 2019). The level of CO2 emissions is closely related to
social, economic, and industrial factors (Adom et al., 2012). Human-generated
sources of CO2 are produced through the burning of fossil fuels, deforestation,
burning of unsustainable biomass, and emissions of CO2 from mineral sources
(Worrell et al., 2001).
Pachauri & Meyer (2014) concluded that CO2 emissions are a major
contributor to global warming and climate change, and reducing them is a key

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