Determinants of CO(2) emissions and economic progress: A case from a developing economy

This study attempts to explore the bond between Pakistani exports, gross capital formation, energy use and carbon dioxide emission. It uses the data from Pakistan spanning over a longer time horizon of 40 years ranging from 1981 to 2020. The results of ARDL analysis show that Pakistani exports have inverse relationship with CO(2) emission in both short as well as long run and the carbon emission reverts to equilibrium at the speed of 54.9%. Increase in carbon emission also lowers export but the causal relationship is only from exports to carbon emission. Energy utilization results in higher carbon emission both in short as well as long run. Based on above findings this study suggests that Pakistan should increase its exports to improve the position of its balance of payment because higher exports do not harm environment in case of Pakistan.