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Measuring the Impact of CO2 Emission and Arable Land on Specific Growth Factors in Pakistan

K. Zaman, I. Q. Shah, S. Jaboob, M. Ahmad

Abstract


Carbon Dioxide (CO2) emission is increasing and Arable Land (AL) is decreasing rapidly as the global economy grows. The cost and impact of CO2 emission on human and ecological system and the importance of arable land for human survival and economic growth is well known in literature. However, a small amount of work is available on the relationship between environmental factors and growth factors. The objective of this paper is to empirically estimate the impact of CO2 and AL (environmental factors) on specific growth factors in Pakistan i.e. Growth (GDP), Industry Value Added (IND) and Financial Development (FD). Data set from 1975-2009 are taken for time series analysis. Augmented Dickey-Fuller (ADF) unit root test and Ordinary Least Squire (OLS) regression test have been applied to measure the impact. It is concluded that GDP and IND have a significant and positive contributor to stimulate CO2 emission in Pakistan's economy. However, FD has a significantly negative impact on CO2. Similarly, GDP and FD have a positive impact on AL, while IND has a negative effect on AL in Pakistan economy. The results also show that an inverted U-shape relationship between land use intensity and industrialization exists. They indicate the extent of sustainability of economic growth (GDP) and economic development (IND and FD) of Pakistan in term of environment (CO2 and AL) which open new dimensions for researchers and policy makers to integrate environmental protection into economic growth and development policies.

Keywords


Environment, Financial Development, Growth, Industrialization, Multiple Regression Model, Pakistan.

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