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Dynamic Relationship between Urbanization, Energy Consumption and Environmental Degradation in Pakistan: Evidence from Structure Break Testing

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  • Arshian Sharif, Syed Ali Raza

    ( Iqra University Karachi, Pakistan)

Abstract

This study investigates the CO2 emission-urbanization-growth in Pakistan by taking time series data from the period of 1972 to 2013. The study applied three approaches of co-integration (ARDL bounds test, Johansen and Juselius and Gregory and Hansen structural break test) to confirm the valid long-run positive interaction between CO2 emission and urbanization. The robustness of co-integrating vectors are further checked using FMOLS and DOLS tests and the results validate the long-run coefficients. The results of VDM exhibit the uni-directional causality between CO2 emission and urbanization running from urbanization to CO2 emission. It was therefore noted that policies in which the government needs to allocate greater portion to environmental safeguard and energy saving components in the planning, such as encouraging energy saving framework and creating a chain of increasing indicators of environmental protection and energy saving.

Suggested Citation

  • Arshian Sharif, Syed Ali Raza, 2016. "Dynamic Relationship between Urbanization, Energy Consumption and Environmental Degradation in Pakistan: Evidence from Structure Break Testing," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 3(1), pages 01-21, March.
    • Handle: RePEc:gei:journl:v:3:y:2016:i:1:p:01-21
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