Analysis of the Nexus of CO2 Emissions, Economic Growth, Land under Cereal Crops and Agriculture Value-Added in Pakistan Using an ARDL Approach

Abstract

The present study attempts to explore the correlation between carbon dioxide emissions (CO2 e), gross domestic product (GDP), land under cereal crops (LCC) and agriculture value-added (AVA) in Pakistan. The study exploits time-series data from 1961 to 2014 and further applies descriptive statistical analysis, unit root test, Johansen co-integration test, autoregressive distributed lag (ARDL) model and pairwise Granger causality test. The study employes augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests to check the stationarity of the variables. The results of the analysis reveal that there is both short- and long-run association between agricultural production, economic growth and carbon dioxide emissions in the country. The long-run results estimate that there is a positive and insignificant association between carbon dioxide emissions, land under cereal crops, and agriculture value-added. The results of the short-run analysis point out that there is a negative and statistically insignificant association between carbon dioxide emissions and gross domestic product. It is very important for the Government of Pakistan’s policymakers to build up agricultural policies, strategies and planning in order to reduce carbon dioxide emissions. Consequently, the country should promote environmentally friendly agricultural practices in order to strengthen its efforts to achieve sustainable agriculture.