Role of renewable energy and non-renewable energy consumption on EKC: Evidence from Pakistan

Abstract

The main contribution of this study is to test the Environmental Kuznets Curve (EKC) hypothesis at individual country analysis by the significance of renewable energy and non-renewable energy consumption in the context of Pakistan. A series of econometric techniques is used for the period of 1970–2012. The findings provide strong support for the presence of the EKC in the case of Pakistan. The results show that renewable energy plays a dominant role in reducing carbon dioxide emission and non-renewable energy consumption indeed the main culprit for promoting carbon dioxide emission. It is also observed that bi-directional causality exists not only between renewable energy consumption and CO2 emission but also non-renewable energy consumption and CO2 emission granger cause each other. Sensitivity analysis is performed to prove that model of this study is stable and findings of the study are valid and reliable for Policy implication. These findings suggest that Government needs to expand investment in renewable energy projects that might contribute to the efforts of climate mitigation.