IS ECONOMIC GROWTH AND INDUSTRIAL GROWTH THE REASON FOR ENVIRONMENTAL DEGRADATION IN SAARC COUNTRIES

Atif Khan Jadoon, Sania Akhtar, Ambreen Sarwar, Syeda Azra Batool, Sarvjeet Kaur Chatrath and Saima Liaqat
Additional contact information
Atif Khan Jadoon: Department of Economics, School of Economics, University of the Punjab, Pakistan
Sania Akhtar: Department of Economics, School of Economics, University of the Punjab, Pakistan
Ambreen Sarwar: Department of Economics, School of Economics, University of the Punjab, Pakistan
Syeda Azra Batool: School of Economics, Bahauddin Zakariya University, Pakistan,
Sarvjeet Kaur Chatrath: Canberra Business School, University of Canberra, Australia,
Saima Liaqat: Department of Economics, Lahore College for Women Universirty, Lahore, Pakistan.

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 6, 418-426

Abstract: In the last four decades, the developing countries have built a heavy industrial base which is seen as a threat to the environment. The trade liberalization policies of the SAARC countries led them to increase the production for domestic use and exports. This increase in industrial output is a real threat to environmental degradation as the industrial share is quite significant in the GDP of the SAARC countries. The present study is designed to check the existence of the Environmental Kuznets Curve (EKC) hypothesis and then use industry output as a regressor to see how it is affecting the environment. The panel regression models are used for estimation by taking data from 1980 to 2018. The results are obtained by using Newey-West standard robust errors. The results suggested that there exists a U-shape relationship between economic growth and Carbon Dioxide (CO2) while an inverted U-shape relationship is found between industrial growth and CO2. Furthermore, a unidirectional causality was observed between industrial growth, human capital, energy consumption, and CO2 while bidirectional causality was observed between urbanization and CO2. The present study suggests that there is a need to adopt environmental protection policies related to the industrial sector in the SAARC region.

Keywords: Economic Growth; Idustrial Growth; Environmental Degradation (search for similar items in EconPapers)
JEL-codes: Q43 Q54 R11 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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