Sectoral Growth and Environmental Degradation: A Case Study of Pakistan

Abstract

The main target behind this research is to overview the empirical linkage between sectoral growth and environmental degradation in Pakistan. For empirical enquiry, this study has used data from 1980 to 2013. Agricultural growth, energy consumption, globalization, industrial growth and population density have been selected as explanatory variables while environmental degradation (CO2 emissions) has been taken as dependent variable. Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and DF-GLS unit root tests have been applied whether the selected variables are stationary or not. Autoregressive Distributive Lag (ARDL) co-integration test has been applied to analyze co-integration among the variables of the model. The empirical findings of this study reveal that there is co-integration among the concerned variables. The empirical analysis of this study reveals that agricultural growth, energy-consumption, industrial growth and population density has significantly positive impact on environmental-degradation. The long run results explain that globalization has insignificant impact on environmental-degradation. The short-run results show that agricultural growth, globalization, industrial growth and population density have insignificant impact on environmental degradation in case of Pakistan. The results show that energy consumption has significantly impact on environmental degradation in short run. The results reveal that Pakistan is producing most efficient and environmental friendly agricultural and industrial products. Granger Causality test is applied in this study to check the causal relations among the variables. Lindmark (2008) point out that environmental degradation is a long run phenomenon. This research has proved that environmental degradation is long run phenomena in Pakistan. The government of Pakistan must increase the agricultural growth in positive way to reduce the environmental degradation. There should be a policy to protect environmental quality with a non-polluted agricultural growth. The Government must also increase the industrial growth in efficient manner to control environmental degradation in Pakistan. There should be a proper control on the energy consumption, negative impacts of globalization and population density to overcome the environmental degradation in Pakistan. By considering a long run phenomenon, Pakistan must treat environmental degradation as its primary issue for its coming generations.