Does Temperature Contribute to Environment Degradation? Pakistani Experience Based on Nonlinear Bounds Testing Approach

Abstract

Many developing countries are acutely vulnerable to global climate changes. In Pakistan, carbon emissions are primarily contributed by the factor of energy production from oil, gas and coal. The objective of this study is to estimate the asymmetric impact of temperature, energy use, economic growth, water scarcity on CO ₂ emissions in Pakistan over their period of 1960–2016. Based on nonlinear bounds testing (NARDL) approach, it is confirmed that there is an asymmetric relationship between temperature and CO ₂ emission, while energy use, population growth and economic growth have a positive effect in the short run. In the long run, energy consumption and economic growth were found to increase emission, while a temperature decrease by 1 per cent leads to 5 per cent decrease in carbon emissions. Population and water availability also reduces emission in Pakistan. Further, the study also confirms the long-run relationship between the variables. The finding of the study noticeably supports the policy to increase renewable energy consumption.