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This paper analyzes the relationship between CO2 emission, economic development and control of corruption for 25 Asian emerging and developing countries in the period from 1998 to 2014. Building upon an Environmental Kuznets Curve (EKC) model, recently developed second generation panel data cointegration methods that account for a number of estimation problems such as unobserved heterogeneity, cross-sectional dependence and endogenous regressors are applied. First results confirm the inverted U-shaped relationship between CO2 emissions and economic growth as stated by the EKC hypothesis. Furthermore, the finding of a statistically significant relationship between control of corruption and CO2 emissions emphasizes the importance of good institutional quality for a sustainable growth path in one of the fastest growing regions in the world.
