Asymmetric effect of educational expenditure, knowledge spillover, and energy consumption on sustainable development: Nuts and Bolts for policy empirics

Abstract

Climate change is raising widespread anxiety, especially in countries that are more vulnerable to environmental disasters. Energy use leads to an increase in Greenhouse gases, especially carbon emissions, which is responsible for environmental degradation. Identifying cultural and economic factors that impact sustainability courses is critical in this context for dealing with ecologically demanding challenges. Education and knowledge spillover in the form of foreign direct investment has long been seen as an effective method of disseminating knowledge, ideas, and behaviors that aid in environmental protection and improve ecological consciousness. This study investigates how energy consumption (LEC), educational expenditure (EDEXP), and knowledge spillover (KNO) affect sustainable development (SD) in the case of Pakistan. This study employs the Non-linear Autoregressive Distributive Lag Model (NARDL) over a data span of 41 years i.e., from 1980 to 2021. The estimations unveil that shocks in educational expenditure pose different results. EDEXP_POSE increases sustainability (0.807 units) while EDEXP-NEG decreases sustainability (0.931 units) while KPO_POS and KPO_NEG positively (0.200 units and 0.011 units respectively) affect environmental sustainability. On the other hand, LEC_POS negatively (1.685 units) affects sustainability while LEC_NEG positively (0.867 units) affects Sustainable growth. Energy consumption has a negative impact on sustainability; thus, the government should prioritize the production of renewable energy sources and support the spread of knowledge that is good for the environment. The government may think about putting tariffs on businesses who import non-green technology since it has a significant and advantageous impact on the environment.