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Does energy use and economic growth allow for environmental sustainability? An empirical analysis of Pakistan

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Abstract

The rapid growth of environmental pollution and the destruction of eco-systems force every individual economy to focus on environmentally friendly economic development. This research explores economic growth, energy use, foreign direct investment, agriculture, industrialization, and urban population growth with environmental sustainability proxied as CO2 emissions from 1971 to 2018. Econometric methods are employed for different purposes as the unit root for the stationary check. ARDL determines the long-run relationship, while the Decoupling Index examines the growing speed of variables and CO2 emissions, and VECM has been used for short- and long-run causalities. The study’s findings confirm the long-run impact of all environmental pollution variables as ECM-1 is negatively significant. The short-run causality test shows CO2 emissions because of economic growth (GDP =  > CO2 ≠ GDP), energy use (ENU =  > CO2 ≠ ENU), and foreign direct investment (FDI =  > CO2 ≠ FDI) at a 1% level. In contrast, CO2 emissions are not the Granger cause of GDP, ENU, and FDI. Economic growth, energy use, and foreign direct investment will increase CO2 emission, not vice versa. The study findings suggest that governments should move toward adopting green technology by implementation of green fiscal policies.

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Data availability

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.

Change history

  • 18 March 2022

    Correction on the 1st affiliation institution name.

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Authors and Affiliations

  1. School of Business, Hunan University of Humanities, Science and Technology, Loudi, Hunan, People’s Republic of China

    Muhammad Mohsin

  2. School of Economics and Management, Shijiazhuang Tiedao University, Shijiazhuang, Hebei, People’s Republic of China

    Sobia Naseem

  3. College of International Student, Wuxi University, 214105, Wuxi, Jiangsu, People’s Republic of China

    Muddassar Sarfraz

  4. Faisalabad Business School, National Textile University, Faisalabad, 38000, Pakistan

    Muhammad Zia-UR-Rehman & Sajjad Ahmad Baig

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  1. Muhammad Mohsin
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  2. Sobia Naseem
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  3. Muddassar Sarfraz
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  4. Muhammad Zia-UR-Rehman
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  5. Sajjad Ahmad Baig
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Contributions

Conceptualization: Muhammad Mohsin, Sobia Naseem and Muddassar Sarfraz. Methodology: Muddassar Sarfraz. Formal analysis and investigation: Muhammad Zia-UR- Rehman and Sajjad Ahmad Baig. Writing—original draft preparation: Muddassar Sarfraz, Muhammad Mohsin. Writing—review and editing: Sobia Naseem. Resources: Muhammad Mohsin; Supervision. Muddassar Sarfraz. All authors approved the current study.

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Correspondence to Muddassar Sarfraz.

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Mohsin, M., Naseem, S., Sarfraz, M. et al. Does energy use and economic growth allow for environmental sustainability? An empirical analysis of Pakistan. Environ Sci Pollut Res 29, 52873–52884 (2022). https://doi.org/10.1007/s11356-022-19600-5

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