HOW DOES URBANIZATION AFFECT CARBON DIOXIDE EMISSIONS? FRESH EVIDENCE FROM PAKISTAN
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Date
2022-03-04
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UMT,Lahore
Abstract
Assessing the linkage between carbon dioxide (𝑪𝑪2) emissions and urbanization (U) has been a
significant focus ofseveral decades of environmentalists, academia, stakeholders, and government
entities. It has drastically changed and exacerbated. Besides substantial social and economic
progress in the urban sector, a larger share of the rural labor force have migrated to the urban
sector for jobs, education, and health facilities. Additionally, significantly stimulating energy use
in urban areas (UA) have resulted in numerous challenges related to ecological pollution. Thus,
in Pakistan, urbanization does have a significant impact on carbon dioxide emissions. It has a
multifaceted effect on pollution emissions. Thus, this research investigates the nonlinear and
linear connection between urbanization and 𝑪𝑪2emissions over 1984-2020 in Pakistan. For the
empirical estimation this research first uses Augmented Dickey fuller (ADF), and Phillips Perron
(pp) unit root tests to inspect the order of integration. After the confirmation of integration order
ahead to inspect the symmetric and asymmetric short and long-run elasticities of coefficients,
ARDL and nonlinear ARDL econometric technique is employed. Additionally, to extract the
direction of causality, the study uses Granger Causality test. The ADF and PP unit tests indicate
mixed order of integration i.e., 𝑪𝑪2, AE, and U are integrated as I (1) and rest of variables
integration order is I (2). After the confirmation of integration order, we used symmetric and
asymmetric ARDL. Besides, the empirical findings from symmetric ARDL depicts that increases
in the level of U meaningfully stimulates the 𝑪𝑪2 in the long run. The results also show that
FDI
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enhances𝑪𝑪2 statistical and significantly. According to the nonlinear ARDL estimation
technique that partial sum of positive changes in U are positively connected with carbon
emissions both in the short and long run. On the other hand, partial sum of negative change in
carbon emissions are negatively connected with carbon emission in the short and long run.
Further, coefficient of institutional quality considerably declines carbon emissions in the long
run. However, FDI and access to electricity are positively connected with carbon emissions in
the long run. Further, the result suggests that FDI inflow causes the environmental degradation
in Pakistan. Additionally, granger causality results indicate that bidirectional causal connection
exist between access to electricity and carbon emissions. On the other hand, one-way causal
linkage exists from carbon emissions to urbanization in Pakistan. Moreover, the finding
concluded that the positive part of urbanization has a more significant effect than the negative
part. The results of the study show that economic friendly consumption pattern needs to be
promoted. The insertion of greener forms of energy in urban dwellers must be enhanced, which
would help combat the upsurge in housing carbon dioxide emissions