Environmental Kuznets Curve hypothesis in Pakistan: Cointegration and Granger causality

Muhammad Shahbaz, Hooi Hooi Lean () and Shahbaz Shabbir ()
Authors registered in the RePEc Author Service: Muhammad Shahbaz

Renewable and Sustainable Energy Reviews, 2012, vol. 16, issue 5, 2947-2953

Abstract: The paper is an effort to fill the gap in the energy literature with a comprehensive country study of Pakistan. We investigate the relationship between CO2 emissions, energy consumption, economic growth and trade openness in Pakistan over the period of 1971–2009. Bounds test for cointegration and Granger causality approach are employed for the empirical analysis. The result suggests that there exists a long-run relationship among the variables and the Environmental Kuznets Curve (EKC) hypothesis is supported. The significant existence of EKC shows the country's effort to condense CO2 emissions and indicates certain achievement of controlling environmental degradation in Pakistan. Furthermore, we find a one-way causal relationship running from economic growth to CO2 emissions. Energy consumption increases CO2 emissions both in the short and long runs. Trade openness reduces CO2 emissions in the long run but it is insignificant in the short run. In addition, the change of CO2 emissions from short run to the long span of time is corrected by about 10% yearly.

Keywords: CO2 emissions; Energy consumption; Trade openness (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (229)

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DOI: 10.1016/j.rser.2012.02.015

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