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Environmental quality and the asymmetrical nonlinear consequences of energy consumption, trade openness and economic development: prospects for environmental management and carbon neutrality

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Abstract

Economic expansion gives rise to modern and energy-efficient technologies and, thus, contributes to a decline in energy usage. Developing countries, including Pakistan, require tremendous efforts to sustain economic growth. However, to attain economic growth, these countries have to cope with greenhouse gas (GHG) emissions and other environmental problems. This research focuses primarily on the asymmetric impacts of energy consumption and economic growth on Pakistan’s environmental quality. Accordingly, secondary data spanning from 1971 to 2018 was used, and carbon dioxide emission (CO2) was considered a target variable (a proxy for environmental quality), whereas energy consumption (E) and gross domestic product (GDP) as a proxy for economic growth, and trade accessibility (TR) and foreign direct investment (FDI) as control variables. The nonlinear autoregressive distributed lag (NARDL) approach is used to verify the asymmetric co-integration between the variables selected. Moreover, to examine data stationarity and nonlinearity, we used the Zivot–Andrews structural break unit root and BDS tests, respectively. The findings confirmed the asymmetric and symmetric co-integrations among the considered variables. In addition, the causality analysis reveals that only negative shocks to TR have an effect on CO2 emissions. Similarly, negative shocks to FDI asymmetrically cause CO2 emissions. Meanwhile, GDP symmetrically affects CO2 emissions. Finally, a neutral causal response was observed between E and CO2 emissions. These findings have policy implications in terms of environmental management and carbon neutrality, and they serve as a baseline for future research.

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Author notes

  1. Imran Khan and Hongdou Lei contributed equally to this research work.

Authors and Affiliations

  1. Binjing College, Nanjing University of Information Science and Technology, Wuxi City, Jiangsu Province, China

    Imran Khan

  2. College of Economics & Management, Northwest A&F University, Yangling, 712100, China

    Hongdou Lei & Mansoor Ahmad Koondhar

  3. The Earth Institute, Columbia University, New York, NY, 10025, USA

    Hongdou Lei

  4. School of Management Science and Engineering, Ministry of Education & Collaborative Innovation Centre on Forecast and Evaluation of Meteorological Disasters (CICFEMD), Nanjing University of Information Science & Technology, Nanjing City, Jiangsu Province, China

    Ashfaq Ahmad Shah

  5. School of Management, Northwestern Polytechnical University, Xi’an, China

    Inayat Khan

  6. China University of Geosciences, Wuhan, China

    Khan Baz

  7. Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden

    Aseem Abu Hatab

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  1. Imran Khan
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Contributions

IK and HL conceived and designed the research. IK, HL and AAS analyzed the data and wrote the paper. IK, MAK, KB and AAH proofread, edited and revised the paper.

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Correspondence to Imran Khan.

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Khan, I., Lei, H., Shah, A.A. et al. Environmental quality and the asymmetrical nonlinear consequences of energy consumption, trade openness and economic development: prospects for environmental management and carbon neutrality. Environ Sci Pollut Res 29, 14654–14664 (2022). https://doi.org/10.1007/s11356-021-16612-5

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