Analyzing Environmental Kuznets Curve (EKC) Hypothesis in case of Pakistan: The Role of Renewable Energy Consumption on Carbon dioxide (CO2) Emissions (Evidence from 1991 to 2021)

Abstract

Testing Environmental Kuznets Curve (EKC) for Pakistan and the role of renewable energy consumption of CO₂ emissions within this framework. We use Annual time-series data from 1991-2021 from world ank. Autoregressive distributed lag (ARDL) approach was used for analysis since the variables were mix of I(0) and I(1). CO₂ emissions, GDP per capita, GDP per capita squared and energy use were analyzed to test does economic growth follows inverted U-shaped pattern with environmental degradation (model 1). Then renewable energy consumption was added to it, whether it reduces emissions (model 2). For both model the coefficient of LN_GDPC shows positive and its squared negative sign suggesting EKC pattern but are statistically insignificant. ARDL bound test confirms long-run cointegration between variables. coefficients of Renewable energy consumption (model2) show negative sign but is statistically insignificant. The findings suggest Pakistan is on rising part of EKC meaning economic growth increases CO2 emission. Environmental improvement for Pakistan requires a strong expansion of clean energy rather relying on economic growth to reduce pollution.