Environmental impact of economic activities: Decoupling perspective of Singapore using log mean Divisia index decomposition technique

Abstract

The chase for economic growth results in global environmental degradation, threatening the socioeconomic aspects of human lives. Singapore is a global economic player, transforming its rural setup into an urban structure to achieve higher economic growth (EG). However, the drive for EG drastically affected its environmental quality. In this respect, the present study analyzes the relationship between Singapore's economic activities and environmental quality. This study uses the Tapio decoupling indicator, Kaya Identity, and the Log Mean Divisia Index (LMDI) decomposition techniques to assess the relationships between these paramount factors from 1990 to 2016. The LMDI analysis reveals that EG and population are the main contributors to carbon emissions (CE), whereas carbon intensity reduces the environmental impact. However, energy intensity and energy structure have depicted mixed effects on CE. Further, Tapio analysis reveals that Singapore has experienced strong decoupling (SD) in most study years. Additionally, expensive negative decoupling (END), weak decoupling (WD), and strong negative decoupling (SND) were also observed during the study period. An expanded decomposition analysis reveals that population and EG deteriorate environmental quality in Singapore. While carbon intensity is the critical driver that strengthens the decoupling progress, energy intensity and structure depict a mixed effect on the decoupling process.