This paper investigates the causal relationship between environmental quality, economic growth and openness in 40 Asian countries by using panel unit root tests and panel cointegration analysis for the period 1970-2011. The results suggest that there is a long-run relationship between these variables. Emissions have a positive long-run relationship with per capita income and openness. Moreover, the results show a strong causality from openness and economic growth to environment in these countries. Yet, CO2 and SO2 emissions do not have any significant effects on income and trade in short- and long-run. So the findings of this paper support the point of view that it is higher trade and economic growth that leads to higher emissions.
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