Towards a cleaner and sustainable Europe and Central Asia: An investigation of the logistics-environment nexus

The logistics industry is the backbone of global trade and is crucial for the attainment of economic progress across the world. However, the industry involves activities that increase the consumption of energy resources including fossil fuels, which harms the environment. Thus, with a special focus on Europe and Central Asia, this study explores the logistics-environment by evaluating the impact of logistics performance (LP) on environmental performance (EP) while controlling for key macroeconomic indicators such as income, trade openness, foreign direct investment, and industrialization. The motivation for this study is derived from the United Nations Sustainable Development Goals (SDGs-11 and 13) which highlight sustainability and climate change mitigation. Using Poisson pseudo maximum likelihood with high-dimensional fixed effects (PPMLHDFE) for 47 European and Central Asian countries over the period 2007-2018, the findings revealed that the overall logistic performance, and some of its components-customs, trade, and transport infrastructure, and tracing and tracking have a significant positive impact on the overall EP, environmental health, and ecosystem vitality. Additionally, the study confirms the detrimental effects of economic growth, trade, and industrialization on environmental quality and health from logistics and supply chain management (SCM) perspectives. Further policy caveats and suggestions are elucidated in the concluding section.