Vol (14), Issue (2), 2021.

Modelling CO2 Emissions, Economic Growth and Electricity Consumption Nexus in Pakistan: Evidence from Cointegration and Causality Analysis

Umer Qazi

Abasyn University Peshawar

Climate change debates have mainly focused on CO2 (carbon dioxide) emissions from fossil fuels. These emissions are both hazardous and complicated. The challenge of satisfying rising energy demand while also decreasing CO2 emissions has become critical in many parts of the world. Using the ARDL approach and Toda Yamamoto Granger causality, this work estimates Pakistan's CO2 emissions from non-traditional and traditional sources between 1971 and 2017. According to the findings, gross domestic product, population, and conventional energy sources all lead to a rise in CO2 emissions, whereas hydropower contributes to reducing emissions. Finally, a causation study established a link between economic growth and CO2 emissions, as well as fossil-fuel-generated electricity and CO2 emissions in the atmosphere. Traditional electricity sources were found to have a one-way causality towards CO2 and a neutrality effect on both hydel electricity and CO2. More people means a growth in demand for energy/electricity, which boosts economic activity and, as a result, increases carbon intensity. However, employing greener energy solutions could help lower greenhouse emissions. Some specific policy recommendations are made in response to the major findings.
Keywords: CO2 emissions, GDP, Energy consumption, ARDL, Toda Yamamoto Causality.




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