Environmental Kuznets Curve and Pakistan: An Empirical Analysis

In this study, the Environmental Kuznets Curve (EKC) is hypothesized to investigate the relationship between CO2 emission, economic growth, energy consumption, trade liberalization and population density in Pakistan with yearly data from 1971 to 2008. The cointegration analysis using Auto Regressive Distributed Lag (ARDL) bounds testing approach is incorporated. The results support the hypothesis both in short-run and long-run and inverted U-shaped relationship is found between CO2 emission and growth. Interestingly we found trade support the environment positively and population contributes to environmental degradation in Pakistan. The energy consumption and growth are the major explanatory variables which contribute to environmental pollution in Pakistan. Moreover, the time series data analysis is used and the stability of variables in estimated model is also assessed.