Nexus between export variety and carbon emissions in Pakistan: The role of FDI and technological development

Ihtisham Ul Haq,Dilawar Khan,Zeeshan Zaib Khattak,Sisira Kumara Naradda Gamage,Piratdin Allayarov,Bahtiyar Mehmed,Bing Xue

doi:10.1371/journal.pone.0263066

Abstract

Carbon emissions constitute a large portion of greenhouse gases that are responsible for global warming and climate change. This study examines the impact of export variety on carbon emissions along with foreign direct investment (FDI) and technological development as determinants of environmental degradation in Pakistan. Moreover, this study is conducted in the context of the environmental Kuznets curve hypothesis (EKC). This study applies dynamic ordinary least squares and error correction models for long-term and short-term estimates, respectively. The results indicate that the EKC hypothesis is valid in the long term. This implies that Pakistan’s economy reached the threshold level of income, after which an increase in income was not responsible for environmental degradation. Export variety restrains environmental degradation in the short term and is not a significant factor in the long term. Energy consumption has aggravated environmental degradation, while FDI and technological development are restraining environmental degradation. Policy measures are recommended to curb environmental degradation in Pakistan.

Highlights

Worldwide, an enormous growth in manufacturing has occurred since the industrial revolution
The purpose of this study was to examine the effect of export variety on environmental degradation considering the role of foreign direct investment (FDI) and technological development
A unit root test was applied to check the nonstationarity of the time series data, and a cointegration test was applied to determine the long-term relationship between environmental degradation, income per capita, income per capita squared, energy, export variety, FDI, and technological development

Summary

Introduction

An enormous growth in manufacturing has occurred since the industrial revolution. There has been a constant rise in the emissions of greenhouse gases (GHGs), and approximately half of this increase has occurred in the last four decades. The period from 1983 to 2012 was the warmest thirty years in the last 1400 years. Carbon emissions from fossil fuels and industrialization have contributed a major portion of GHG emissions during the last four decades. Carbon emissions accounted for approximately 76% of GHGs, followed by methane at 16% and nitrous oxide at 6%. Since 1970, GHG emissions have increased by 75%, and energy production, agriculture, forestry and land use are the major sectors of GHG emissions [1]. GHG emissions are responsible for global warming and climate change.

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