Determinants of Environmental Degradation in Economy of Pakistan: Empirical Evidence of Pakistan (1980-2020)

Abstract

The entire globe is now facing significant challenges as a result of environmental deterioration, especially developing nations most of all. All living things depend on their environment for their health and well-being. To ensure the prosperity of future generations, environmental protection is crucial. Also the environmental factors have a considerable impact on Pakistan's economic growth. Examining the causes of Pakistan's environmental degradation is the study's primary goal. This study employed carbon dioxide (CO2) emissions, one of the most common pollutants, as a dependent variable and trade openness, population growth, energy consumption, industrialization, and GDP as independent factors. Secondary data collected from WDI, Handbook of Statistics and different other sources were used. For the purpose of Time series analysis, Auto-regressive distributed lag (ARDL) model technique was used for the short and long run analysis for the period of 1980 to 2020. According to the results of the CUSUM and CUSUMSQ tests, every coefficient in the model showed stability. The study's findings suggested that GDP, population growth, industrialization, and energy consumption were positively contributed to environmental deterioration in Pakistan, however trade openness had a negative influence on environmental degradation. This study may help in the development of suitable environmental initiatives and policies.