Does Energy-Growth and Environment Quality Matter for Agriculture Sector in Pakistan or not? An Application of Cointegration Approach

Abbas Ali Chandio, Yuansheng Jiang, Abdul Rauf, Amir Ali Mirani, Rashid Usman Shar, Fayyaz Ahmad and Khurram Shehzad ()
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Abbas Ali Chandio: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Yuansheng Jiang: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Abdul Rauf: School of Economics and Management, Southeast University, Nanjing 211189, Jiangsu, China
Amir Ali Mirani: College of Management, Sichuan Agricultural University, Chengdu 611130, Sichuan, China
Rashid Usman Shar: College of Management, Sichuan Agricultural University, Chengdu 611130, Sichuan, China
Fayyaz Ahmad: School of Economics, Lanzhou University, Lanzhou 730000, Gansu, China

Energies, 2019, vol. 12, issue 10, 1-17

Abstract: The main objective of this paper is to examine the long-term effects of financial development, economic growth, energy consumption (electricity consumption in the agriculture sector), foreign direct investment (FDI), and population on the environmental quality in Pakistan during the period of 1980 to 2016. We use CO 2 emissions from the agriculture sector as a proxy indicator for environmental quality. We employ various unit root tests (e.g., ADF, PP, ERS, KPSS) and structural break unit root tests (Z&A, CMR) to check the stationarity and structural break in the data series. Cointegration tests, i.e., Johansen, Engle-Granger, and ARDL cointegration approaches are used to ensure their robustness. Results showed that significant long-term cointegration exists among the variables. Findings also indicated that an increase in financial development and foreign direct investment (FDI) improves environmental quality, whereas the increase in economic growth and electricity consumption in the agriculture sector degrades environmental quality in Pakistan. Based on the findings, we suggest policymakers should provide a conducive environment for foreign investment. Moreover, it is also suggested that a reliance on fossil fuels be reduced and a transition to renewable energy sources be encouraged to decrease the environmental pollution in the country.

Keywords: financial development; carbon emissions; energy consumption; environment quality cointegration; Pakistan (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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