The Impact of Renewable Energy Consumption, Economic Growth and Exports on CO₂ Emissions in Pakistan: An ARDL Approach

Abstract

The dynamic relationship among CO₂ emissions and Economic factors such as renewable energy consumption, GDP growth, and exports is an important aspect in view of environmental sustainability and economic development for developing countries like Pakistan. This research aims to explore the short-term and long-term relationship between CO₂ emissions and renewable energy, GDP growth, and exports in Pakistan. by using data from the year 1991–2022 and the ARDL technique of cointegration to check both long and short-term relationships among GDP, RE, exports and CO₂ emissions. and to check the stability and robustness of the model after estimation, a range of diagnostic tests is carried out. These include descriptive statistics, unit root tests, ARDL bounds testing. The results of the ARDL analysis reveal that Increased use of renewable energy significantly reduces CO₂ emissions in both the short and long term. GDP growth is associated with increased CO₂ emissions, both currently and with a lag, indicating a persistent relationship between economic activities and carbon emissions. In the short term, increased exports are associated with a decrease in CO₂ emissions, and in the long term, exports do not significantly affect CO₂ emissions. This paper, therefore, further contributes to what the literature provides through an in-depth analysis of how economic activities and environmental impacts interplay in Pakistan, emphasizing balanced economic and ecological policies for long-term sustainability.