SECTORAL GROWTH AND CARBON EMISSIONS IN PAKISTAN

Abstract

The basic aim to write this research paper was to assess the impact of relevant determinants like GDP per capita and sectoral growth on carbon emissions in Pakistan. Latest annual time series data set was collected from World Bank Indicators during period 1971-2020 due to unavailability of data of some variables for year 2021. ARDL bound testing and simple VAR techniques of estimation were employed. According to ARDL bound testing foreign direct investment, GDP growth and trade openness have positive and significant effect upon carbon emissions in Pakistan. Value addition in agriculture, Industry, Services, Exports of goods and services and gross fixed capital formation affected carbon emissions negatively and significantly. Impulse response functions and variance decomposition analysis was also made to see the dynamic behaviour of determinants of carbon emissions in Pakistan. Relevant authorities should focus on checking the impact of sectoral growth on carbon emissions. Based on the above mentioned findings, we can say that climate- smart agriculture technology should be adopted, emission free apparatus should be installed in industry and environment friendly services should be provided to prevent from environmental degradation. Keywords: Agriculture, Industry, Services sector, GDP per capita, Carbon Emission.