Economic Growth, Energy and Environmental Degradation Nexus: A Case Study in Pakistan

Abstract

This study estimated the growth, energy and environmental degradation nexus in Pakistan by using time series data. The data have been taken from the World Bank for the year 1971 to 2011. The data analysis was done by using the approach of co-integration (ARDL bound test) to confirm the effective long-term positive relationship among carbon dioxide emissions, per capita income growth and the per capita income gap to monitor the trend of the Environmental Kuznets Curve in Pakistan. The results of the study showed that there is no evidence of a serial correlation between the variables in the discussion, but they have a long-term association. Energy usage and per capita real income, has a positive relationship with CO₂ emissions. The study has concluded that there is an evidence of inverted U shaped EKC in Pakistan and this relationship varies with different types of pollutants and geographical regions. Initially, income has a positive relationship with CO₂ emission but after the turning point, both have a negative relationship.