Identifying the impacts of human capital on carbon emissions in Pakistan

Abstract

Abstract At present, carbon emissions reduction is a very important challenge all over the world. Improvement of human capital helps to reduce carbon emissions. This paper studies the long- and short-term effects of human capital on carbon emissions in Pakistan from 1971 to 2014. We employ an autoregressive distributed lag model and the vector error correction model to analyze the co-integration and direction of causalities between human capital and carbon emissions, respectively. Results show that a significant long-term relationship exists between human capital and carbon emissions. Improvement of human capital will reduce carbon emissions without decreasing economic growth. Granger causality test results describe the bidirectional causality that exists between human capital and carbon emissions in the long term and no causality in the short term. Human capital and economic growth have feedback effects in the long term and no effect in the short term. The results of this study show that improvement in human capital through education will help carbon emissions reduction in the long term. This study will help policymakers devise a comprehensive strategy to reduce carbon emissions through improvement of human capital.