Sustainable development in Pakistan in the context of energy consumption demand and environmental degradation

Abstract

The aim of this paper is to analyze the impact of population growth, economic growth, energy intensity (EI) growth and urbanization growth on environmental degradation in Pakistan. The paper will investigate simultaneously the effect of population growth, urbanization, energy consumption and environmental degradation on the sustainable economic growth as well. To ensure the sustainable development of the economy environmental degradation should not increase with time but be reduced or at least remain constant. If it increases, we will move further away for sustainability, while if it decreases, we will move closer towards it. The results indicate that 1% increase in GDP growth leads to 0.84% increase in growth rate of carbon dioxide emissions, and an increase of 1% in the energy intensity growth rate causes almost 0.24% increases in growth rate of CO 2 emissions. As far as results of co-integrating vector normalized on GDP growth is concerned, the coefficients of EI growth and CO 2 emissions growth are found to be affecting the level of development significantly and positively by 0.3% and 1.2%, respectively. This indicates that in Pakistan process of economic development is dependent on the level of energy use and the resultant of this energy use, CO 2 emissions caused economic growth significantly and positively. In addition to the rapid urbanization and increased population growth affect positively to environmental degradation while negatively and significantly to the economic development in the long run.