Vol. 5 No. 2 (2022): Pakistan Journal of International Affairs
Articles

VALIDITY OF ENVIRONMENTAL KUZNETS CURVE (EKC) IN PAKISTAN: A CO-INTEGRATION ANALYSIS

Published 2022-05-29

Abstract

The aim of this study is to evaluate the validity of Environmental Kuznets Curve (EKC) in the context of Pakistan. Time series data for the periods between 1990-2015 were collected from World Development Indicator (WDI). Time series data were tested for stationarity employing Augmented Dickey-Fuller (ADF) test, as all the variables are integrated at different orders 1(0) and 1(1). The ADF test resut suggest that the Autoregressive Distributed Lag Model (ARDL) is the most suited model to estimate the selected variables of carbon dioxide emission, GDP per capita and GDP per capita square. The results suggested a positive association between carbon emissions and GDP per capita while GDP per capita square has negatively associated with carbon emissions, both in long and short run. The final results indicated the valid application of Environmental Kuznets Curve on Pakistan. The study concluded that the shape of EKC curve, in Pakistan, is inverted U due to the association between GDP and carbon emissions. The study suggested that the Government of Pakistan can take concrete steps in the form of different policies and strategies to minimize the negative effects of growth on environment. This could be in the form of levies, green productions, taxes on pollution productions, and increasing the use of renewable resources for cleaner energy and consumption