Abstract

Economic expansion gives rise to modern and energy-efficient technologies and, thus, contributes to a decline in energy usage. Developing countries, including Pakistan, require tremendous efforts to sustain economic growth. However, to attain economic growth, these countries have to cope with greenhouse gas (GHG) emissions and other environmental problems. This research focuses primarily on the asymmetric impacts of energy consumption and economic growth on Pakistan’s environmental quality. Accordingly, secondary data spanning from 1971 to 2018 was used, and carbon dioxide emission (CO₂) was considered a target variable (a proxy for environmental quality), whereas energy consumption (E) and gross domestic product (GDP) as a proxy for economic growth, and trade accessibility (TR) and foreign direct investment (FDI) as control variables. The nonlinear autoregressive distributed lag (NARDL) approach is used to verify the asymmetric co-integration between the variables selected. Moreover, to examine data stationarity and nonlinearity, we used the Zivot–Andrews structural break unit root and BDS tests, respectively. The findings confirmed the asymmetric and symmetric co-integrations among the considered variables. In addition, the causality analysis reveals that only negative shocks to TR have an effect on CO₂ emissions. Similarly, negative shocks to FDI asymmetrically cause CO₂ emissions. Meanwhile, GDP symmetrically affects CO₂ emissions. Finally, a neutral causal response was observed between E and CO₂ emissions. These findings have policy implications in terms of environmental management and carbon neutrality, and they serve as a baseline for future research.

Keywords

Carbon neutrality; CO2 emissions; Economic expansion; Energy usage; NARDL approach; Trade openness

Published in

Environmental Science and Pollution Research
2022, Volume: 29, number: 10, pages: 14654-14664

SLU Authors

• Abouhatab, Assem

  • Department of Economics, Swedish University of Agricultural Sciences
    

Sustainable Development Goals

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Strengthen the means of implementation and revitalize the global partnership for sustainable development
Ensure sustainable consumption and production patterns


UKÄ Subject classification

Economics


Publication identifier

DOI: https://doi.org/10.1007/s11356-021-16612-5

Permanent link to this page (URI)

https://res.slu.se/id/publ/113998