The impact of CO₂ emission on health expenditure: lesson learned from ASEAN five countries

Abstract

This study is motivated by the issue of the Green Economy regime. The Green Economy regime promotes economic development while maintaining good environmental stability without destroying nature. Increased CO2 emissions, especially in the 5 ASEAN countries, will impact the surrounding environment, leading to worsening health levels in the long term. This poor level of health resulting from CO2 emissions will increase spending on health. The study aims to empirically analyse and see how the condition of CO2 carbon emissions will affect the health expenditure sector. The analysis of this study is by analysing Time Series data sourced from several websites such as the World Bank and also data from the Ministry of Finance. The methodology uses multiple linear regression models, or the Ordinary Least Square (OLS) method, to see how the effect of CO2 carbon emissions on health expenditure. The methodology also uses Panel Data Regression consisting of the Common Effect Model, Fixed Effect Model, and Random Effect Model. The variables used are CO2 emission as an independent variable and current health expenditure per capita as the dependent variable. The results obtained from this study are that increasing CO2 carbon emissions lead to an increase in health expenditures, along with a decrease in the quality of the surrounding environment and will have an impact on public health so that the relationship between CO2 carbon emissions and health expenditures has a positive and significant relationship.