Financial Development, Energy Consumption and CO2 Emissions: Evidence from ARDL Approach for Pakistan

Muhammad Shahbaz, Faridul Islam () and Butt Muhammad Sabihuddin

MPRA Paper from University Library of Munich, Germany

Abstract: The paper explores the existence of a long run equilibrium relationship among CO2 emissions, financial development, economic growth, energy consumption, and population growth in Pakistan. ARDL bounds testing approach to cointegration is implemented to the data for 1974-2009. The results confirm a long run relation among these variables. Financial development appears to help reduce CO2 emissions. The main contributors to CO2 emissions however are: economic growth, population growth and energy consumption. Our results also lend support to the existence of Environmental Kuznets Curve for Pakistan. Based on the findings we argue that policy focus on financial development might be helpful in reducing environmental degradation.

Keywords: Financial Development; CO2 Emissions; Cointegration (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Date: 2011-02-18, Revised 2011-04-07
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:30138

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