Abstract

• There are two main patterns of the liberalization process in Myanmar. The first one, acted in September 1988, concerns with the marketization and removal of restrictions in the agriculture sector. The second one is the Foreign Investment Law. This allows foreign capitals in a company from joint venture participation with a minimum of 35% of foreign holdings to a full detention with 100% of foreign equity. This study will assess the effect of foreign direct investment (FDI) on CO2 emissions of Myanmar in the short-run and long-run impact by using an auto-regression distributed lag (ARDL) model. The data set for this study is from the time series data set of Myanmar (1990-2020). The sources of secondary data are World Bank, DICA, and Konema. This study makes a significant contribution by examining the impact of FDI and trade liberalization on Myanmar's CO2 emissions. The results of this study provide evidence of the possibility to keep and rehabilitate the environment along with Myanmar’s industrialization and urbanization through trade liberalization. As the developing and emerging Myanmar economies are on a transition path towards development, guaranteeing environmental sustainability. Myanmar government should be encouraging the types of FDI which ensure tech know-how and building a clean environment.