Modelling the ecological footprints, climate change and economic growth nexus

Abstract

Ecological footprint (EF) is created by human demands for water, infrastructure, energy and food, among other things, resulting in pollution, depletion of resources and ecological disturbance. The sustainability goal in relation to EF is to reduce the impact of climate change on natural resources for long‐term growth. Pakistan is a country facing an ecological deficit and has difficulty striking a balance between economic development and environmental protection worldwide. As a result of its significant role in achieving sustainability, which is essential for human life, EF has become a global phenomenon. The study considered the nexus of economic growth, EF and its subcomponents for the economy of Pakistan. The Johansen co‐integration technique was used to analyse the short‐run (ECM) and long‐run relationship. The results showed that urbanisation, financial development, economic growth and temperature have positive effects on EFs, whereas rainfall and carbon dioxide emissions have a negative effect on EFs. The ECM test demonstrates that studied variables are responsible for 46% of disequilibrium in EF, which is less than the moderate threshold. On the contrary, in the model of EF, the coefficient of temperature in the long‐run speed is negative, indicating that the system is diverging from equilibrium and correcting its prior period disequilibrium at a rate of 663% a year, while that of CO2 emissions is positive, indicating that the system is converging towards equilibrium and correcting its prior period disequilibrium at a rate of 77.2% a year.