Beyond the Curve: How Economic Complexity and Pandemics Reshape the Energy-Emissions Nexus in Asia

This study examines how economic complexity, the COVID-19 pandemic, and financial crises are related to economic growth, energy consumption, and carbon dioxide (CO2) emissions in 49 Asian countries from 1990 to 2020. Asia is a diverse region with an active tourism sector, which makes it a suitable setting for testing the Environmental Kuznets Curve (EKC) hypothesis. We use a one-step system generalized method of moments (System GMM) estimator to assess the EKC framework and compare five Asian macro-regions using both the complete dataset and a version that excludes the years influenced by the COVID-19 pandemic. The results show that economic growth, energy consumption, and tourism activity are associated with higher CO2emissions across regions. In several regions, economic complexity, tourism activity, and indicators related to crises do not have a statistically clear effect, suggesting that their environmental influence varies between regions. Where these variables matter, COVID-19 tends to increase emissions, while financial crises and lower energy consumption are associated with reductions. The EKC hypothesis is supported in the full sample and in the sample that excludes the COVID-19 period. These findings point to the policy needs related to post-COVID-19 energy and environmental cooperation, technological improvement, and sustainable development in Asian countries.