Carbon emissions and industrial growth: an ARDL analysis for Pakistan

Abstract

Purpose This paper is a direct extension of the work by Hussain et al. (2012). They have investigated a long-term relationship between climatic change and economic growth in case of Pakistan. Agricultural sector plays an important role in economic field, whereas industrial sector is the main source of carbon dioxide (CO2) emission. Therefore, this study aims to replace economic growth variable with industrial growth in case of Pakistan. Design/methodology/approach Investigation is made on the basis of the environmental Kuznets curve by using the time series data during the period 1971-2009. The per capital carbon dioxide (CO2) emission is used as an environmental indicator and per capita industrial income as the economic indicator. Different econometric tools including augmented Dickey–Fuller, autoregressive distributed lag and Granger-causality test are used to verify this relationship. Findings The empirical findings will help the policy-makers of Pakistan in developing new standards and monitoring networks for reducing CO2 emission. It is essential to extend the current research work at provincial and different sectors levels in order to have clear understanding about the impact of current emission rate. Originality/value This study replaces economic growth variable with industrial growth in case of Pakistan because the industrial sector is the main source of carbon dioxide (CO2) emission. This study is to investigate a long-term relationship between climatic change and industrial growth in case of Pakistan.