Incorporating Environmental Pollution and Human Development in the Energy-Growth Nexus: A Novel Long Run Investigation for Pakistan

Nabila Abid, Jianzu Wu, Fayyaz Ahmad, Muhammad Umar Draz, Abbas Ali Chandio and Hui Xu
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Nabila Abid: School of Management, Lanzhou University, Lanzhou 730000, China
Jianzu Wu: School of Management, Lanzhou University, Lanzhou 730000, China
Fayyaz Ahmad: School of Economics, Lanzhou University, Lanzhou 730000, China
Muhammad Umar Draz: Canadore College, Canadore at Stanford, 930 Progress Avenue, Scarborough, ON M1G 3T5, Canada
Abbas Ali Chandio: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Hui Xu: School of Economics, Lanzhou University, Lanzhou 730000, China

IJERPH, 2020, vol. 17, issue 14, 1-22

Abstract: Energy acts as a catalyst to boost the human development index (HDI) in a country. However, the overuse of energy leads to environmental deterioration, which is a byproduct of economic development. Due to the utilization of non-renewable energy sources for a long time, worldwide environmental conditions have become alarming. This study investigates the relationship between renewable and non-renewable energy consumption, economic growth, environmental sustainability, and the human development index (HDI) in Pakistan. The investigation incorporates population growth and technology variables to form a multivariate framework. We use a fully modified ordinary least squares (FMOLS) approach to time-series data from 1990–2017. To check the robustness of estimations, we apply the Gregory–Hansen test with a causality test under the VECM to confirm this association’s directions. Our findings confirm that non-renewable energy sources have a positive association with economic growth and CO 2 emissions. However, human development, technology, and renewable energy boost economic development and reduce environmental pollution in Pakistan. The co-integration results confirmed the long run connectivity among all variables. The causality outcomes support the bidirectional causality between renewable and non-renewable energy consumption, economic growth, and CO 2 emissions, both in the short and long run. These outcomes suggest that Pakistan should focus on energy shifts and gradually increase the share of renewables in its energy mix under the China Pakistan Economic Corridor (CPEC). Additionally, the government should increase human and technological development to enhance economic and environmental sustainability.

Keywords: energy consumption; economic growth; CO 2 emissions; human development index (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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