Investigate the Economic Performance, Per Capita GDP, Energy Consumption, Domestic Product and Trade Openness on Carbon Emissions in Pakistan
Author(s)
Nosheen Malik , Malik Tayyab Ali , Muhammad Asad yaqoob , Muhammad zahid sharif , Kashif Ali ,
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Abstract
This thesis aims to study the effect of Economic Performance, Per Capita GDP, energy consumption, and trade openness on carbon emissions in Pakistan during the period 1990-2019. The importance of analyzing the effect of these factors on CO2 (carbon dioxide) emissions, also known as “greenhouse gases emissions”, stems from the underlying danger of these emissions. Recently, the negative effects of these emissions on climate change have become a hot topic around the world. More alarmingly, the United Nations Environment Program (UNEP, 2014) has announced that global temperature has increased by two degrees Celsius, these changes might be irreversible.
Pakistan was one of the first countries that took actions regarding the subject of the impact of carbon emissions. Pakistan signed the climate change agreement in 1992, and ratified the Kyoto Protocol in 1997. Pakistan’s second report on the climate change for 2000 mentioned that the total greenhouse gas emissions are equivalent to 20 million tons of carbon dioxide. The energy sector, which accounted to about 27% of these emissions, takes lead. It is closely followed by the transport sector which accounted to about 20%. The third most influential sector is the waste sector which accounted for about 13% of the emissions tracking the timeline of GDP shows CO2 emissions have taken an upward trend during the period of 1990-2019, except for the period between 1988 and 1991 where GDP level declined as a result of the economic crisis to the Pakistani economy which was a result of the deterioration of exchange rate during that period.
Findings also indicate that a per capita carbon emission have a positive relationship with foreign trade to GDP ratio and with energy consumption, while Economic Performance, has a negative and significant impact on per capita carbon emissions in the long- run. The results also support the validity of EKC hypothesis in Pakistan’s economy, which means that the level of CO2 emissions in Pakistan increases with Per Capita GDP during the initial stage, continues until a stabilization point, and then emissions start declining. Moreover, using error-correction depending on the Granger causality test, the study finds a causal relationship between the variables. In particularly, there exists a unidirectional long-run causality from per capita GDP, the square of per capita GDP, per capita energyuse and Economic Performance to per capita carbon emissions.
Keywords
Economic Performance, Per Capita GDP, Energy Consumption, Domestic Product,Trade Openness , Carbon Emissions
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