Toward economic growth without emissions growth: the role of urbanization & industrialization in Pakistan

Abstract

The dynamic relationship between economic activity (economic growth) and environmental impact (carbon dioxide emissions) is the most debated topic in the present world. The global world is intended to curb environmental impact up to a threshold level of the 1990s while maintaining the same pace of economic growth. This study analyzes the decoupling of economic activity from environmental impact and its main driving forces from 1980 to 2018 for Pakistan. The decoupling status is examined using Tapio decoupling elasticity analysis. The cointegration and Impulse Response Function (IRF) are employed to explore the role of main decoupling drivers. The Tapio decoupling results exhibit that Pakistan experienced Expensive Negative Decoupling (END) for multiple years. Similarly, the Johanson Juselius (JJ) Cointegration assures the presence of a long-term relationship between the selected variables. The long-term regression estimates show that carbon intensity and urbanization are the main decoupling drivers. The industrialization and economic growth also weaken the decoupling progress in Pakistan. The value addition of the paper is that it exposes industrialization and urbanization as the two prominent factors of both economic growth and carbon emissions. Further, the industrial sector of Pakistan operates on polluted industrial stock, which needs to be replaced with energy-efficient technological stock. The study also added that renewable energy needs to be indulged in the industrial and urban sectors.

Impact of industrialisation on economic growth in Nigeria

“…There are so many empirical investigations on the effect of industrialisation in developed and developing economies. Khan and Majeed (2022) investigated the effect of urbanisation and industrialisation in achieving economic growth without emission in Pakistan from 1980 to 2018 by employing the Johansen Joselius co-integration and impulse response function (TRF) techniques to determine the impact of the decoupling drivers. The study found industrialisation and urbanisation as the two factors of economic growth and carbon emission.…”

Environmental impact of economic activities: Decoupling perspective of Singapore using log mean Divisia index decomposition technique

“…This increases energy consumption at an exponential rate, resulting in environmental degradation and natural hazards. Similarly, most anthropogenic activities, such as primary energy consumption, population growth, and deforestation, lead to severe environmental degradation (Khan & Majeed, 2023). Among these, population growth, on the one side, is considered an essential factor for economic growth (EG) because it enhances the country's human resources and opens new avenues for economic gains.…”