Investigating the nexus among sulfur dioxide emission, energy consumption, and economic growth: empirical evidence from Pakistan

Khuda Bakhsh,; Akmal, Tanzila; Ahmad, Tauqeer; Abbas, Qasir

Investigating the nexus among sulfur dioxide emission, energy consumption, and economic growth: empirical evidence from Pakistan

2022

Khuda Bakhsh, | Akmal, Tanzila | Ahmad, Tauqeer | Abbas, Qasir

Developing countries like Pakistan majorly depend on fossil fuels for achieving higher economic growth but have sloppy environmental rules and regulations in order to attract foreign direct investment (FDI). As a result, energy consumption is considered the primary cause of environmental degradation. Besides CO₂ emission, environmental degradation is also associated with emission of sulfur dioxide (SO₂). The purpose of this study was to investigate the relationship among SO₂ emissions, energy consumption, economic growth, and FDI in Pakistan. By applying the 3SLS method, study has estimated the scale effect, composition effect, and technique effect. The scale effect and technique effect findings indicated that capital stock, FDI, and SO₂ emissions all had a significant impact on GDP. When the capital accumulation effects of FDI were considered, the relationship between FDI and stock of capital was found to be positive. According to the technique effect results, FDI, population density, and energy consumption were all significantly related to SO₂ emissions. The study came to a conclusion with significant policy implications.

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