Asymmetric Impact of Energy Consumption on CO2 Emissions: A Case Study for Pakistan

Abstract

Efficient use of energy resources is one of the best solutions for protecting the world's ecosystem and achieving sustainability of economic growth. The present study has investigated the estimated symmetric and asymmetric relationship between energy consumption (EC) and CO2 emission in Pakistan. For empirical testing, ARDL and NARDL approaches are employed from 1976 to 2019. The outcomes of NARDL found that positive and negative shocks in EC substantially increased CO2 emission in the short run. However, in the long run, negative shock significantly decreases CO2 emission, and positive shock insignificantly increases CO2 emission in Pakistan. It is suggested that government should concentrate on clean energy production initiatives to promote the use of renewable energy. Similarly, it is anticipated that environmentally-conscious planning throughout the capital spending stage of manufacturing activities and the proper application of environmental levies will be beneficial in lowering carbon footprints associated with all sectors of the economy.