An empirical analysis of CO2 emission in Pakistan using EKC hypothesis

• Published date: 14 June 2013
• DOI: https://doi.org/10.1108/JITLP-10-2012-0015
• Pages: 188-200
• Date: 14 June 2013
• Author: Khalid Ahmed,Wei Long
• Subject Matter: Economics

An empirical analysis of CO

2

emission in Pakistan using

EKC hypothesis

Khalid Ahmed and Wei Long

School of Economics, Wuhan University of Technology,

Wuhan, People’s Republic of China

Abstract

Purpose – The purposeof this paper is to fill the gap between energyand growth literature in Pakistan.

In thisregard, the authors investigatedthe environmentalKuznets curve (EKC)hypothesis and concluded

the relationship between carbon emission and other four variables (energy consumption, economic

growth, trade opennessand population) at the same time. It is hoped thatthe policy implications of this

research will providea strong base to address the problem of environmentaldegradation in Pakistan.

Design/methodology/approach – This study investigates the relationship between CO

2

emission,

economic growth, energy consumption, trade-liberalization, and population density by using the EKC

hypothesis for Pakistan. The cointegration analysis with Auto Regressive Distributed Lag (ARDL)

bound testing approach is employed over time series data from the period 1971 to 2008. The stability

of model was also checked at the end.

Findings – The results of the study do not support EKC in a short-run, whereas the long-run inverted

U shaped hypothesis was confirmed between carbon emission and growth, energy consumption, trade

openness and population density. Thus, findings of the study confirmed that EKC was a long-run

phenomenon in the case of Pakistan and most interestingly, with all other explanatory variables,

population density also appeared to be a contributor to environmental degradation in Pakistan.

Originality/value – This work is original and a new contribution to single country analysis. It is

first time that carbon emission is empirically tested for all four major determinants (economic growth,

energy consumption, trade-liberalization, and population density) at the same time. The long ranged

time series data of 38 years enhances the validity of results. The most surprising finding of this

research is that the population density also contributes to environmental degradation in Pakistan.

Keywords Pakistan, Population distribution,Energy consumption, Economic growth,Trade,

EnvironmentalKuznets curve, CO

2

emission, Populationdensity, Cointegration

Paper type Research paper

1. Introduction

The increasingly widening environmental concerns linked to the adverse climate change

impact on earth have recently persuaded world economies to use the green energy and to

considerably reduce emission of CO

2

. According to the recent studies, the large part of

carbon emission will be coming from the developing economies due to the rapid

economic growth. Ever since the beginning of industrialisation in 1970s, energy

consumption has largely been on the rampant which multiplied the international tr ade

but has seemingly posited some serious threats to environment. The process of

globalization, which advantages the developing countries to nurture their economies

through reduced investment and trade barriers including the transfer of technology,

mobilised capital and labour. However, it also shifts the burden of increasing share of

environmental pollution due to the increase in energy consumption. The ongoing

process of industrialization in developing countries is highly vulnerable to global

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1477-0024.htm

Journal of International Trade Law

and Policy

Vol. 12 No. 2, 2013

pp. 188-200

qEmerald Group Publishing Limited

1477-0024

DOI 10.1108/JITLP-10-2012-0015

JITLP

12,2

188