Impact of electricity generation, consumption, energy trade, and ICT on the environment in Pakistan: a NARDL and ARDL analysis

Abstract

ABSTRACT Global concern over socioeconomic activities’ environmental impact is undeniable, given their implications for climate and human welfare. In our study, we analyze Pakistan’s landscape, with emphasis on the effects of electricity generation and consumption (both symmetric and asymmetric), energy trade, and the role of information and communication technology (ICT). We harnessed data from 1993 to 2020, sourced from World Development Indicators, Climate Watch, and the USA EIA. Our analysis involved application of the Nonlinear Autoregressive Distributed Lag model and the Autoregressive Distributed Lag bounds testing methods. Our results reveal that electricity consumption, whether experiencing positive or negative shocks, exhibits a tendency to elevate emissions over the long term. Similarly, shocks in electricity generation from fossil fuels, whether positive or negative, have adverse environmental consequences both in the short and long run. A negative shock in electricity generation from renewable and alternative sources triggers environmental degradation. Remarkably, nuclear energy plays a pivotal role in bolstering environmental sustainability in Pakistan. Conversely, we identified factors contributing to ecological degradation, including imports of coal, crude oil, metallurgical coke, and ICT usage, in the long run. Equally, trade and natural resources rent emerge as mitigating factors over time. Ultimately, ourstudy underscores the importance of diversifying the energy mix, with a particular emphasis on expanding the renewable sources for reducing emissions and fostering environmental sustainability in Pakistan. Additionally, our research suggests that leveraging natural resources rent and trade capabilities can pave the way for an eco-friendlier future in the country.