Fiscal policy and environment: a long-run multivariate empirical analysis of ecological footprint in Pakistan

Abstract

Despite differences in carbon emissions shares and differences in ecological footprint patterns of each nation, these differences are guaranteed to show similar features in long run, thus making it a global issue.An increase in economic growth contributes to an increase in waste production with an impact on environmental degradation and climate change. An ecological footprint is a relatively comprehensive measure than previously used 2 emission as an environmental proxy as it includes comprehensive multi-facets environmental indicators because ecological footprint includes built-up land, 2 emission, cropland, fishing ground, grazing land, and forest products which has included all environmental dimensions. This research has focused to empirically investigate the long-run impact of fiscal policy on the ecological footprint in Pakistan keeping different socio-economic factors into consideration. Per annum, time-series data have been collected between 1976 and 2018. The Augmented Dickey-Fuller test has been employed to determine the unit root of the data. To investigate the long-run association between fiscal policy and ecological footprint, modern econometric techniques such as Johansen co-integration test, ARDL Bounds test, different diagnostic tests, and variance decomposition analysis are used. Johnson co-integration test depicts significant long-run co-integration between fiscal policy, ecological footprint, and its major socio-economic determinants in Pakistan. Conclusion of ARDL model shows that 1% increase in public development expenditures, total population, GDP, and energy consumption increase 0.19, 2.17, 1.16, and 2.17% ecological footprint respectively in Pakistan between 1976 and 2018 and vice versa. However, it is also derived that a 1% increase in public tax and non-tax revenue and public current expenditures (in health, education, and other social sectors) shrink 0.36 and 0.013% ecological footprint in the long-run in Pakistan. The stability, reliability, and credibility of the ARDL model are found correct based on different diagnostic tests. Variance decomposition analysis also depicts fiscal policy significantly cause ecological footprint in Pakistan.

The effects of environmental tax on Ecological Footprint and Carbon dioxide emissions: a nonlinear cointegration analysis on Turkey

“…However, compared to carbon emissions, EFP is a more comprehensive measure in terms of detecting ED because it covers the environment in all its dimensions, including multifaceted environmental indicators like built-up lands, carbon emissions, croplands, fishing grounds, grazing lands, and forest areas. Indeed, one of the most important sustainability indicators in today's world is the EFP, together with the green economy (Zahra et al 2021). The EFP is an effective tool to measure the impact of human consumption on nature and the resources needed to meet human needs (Sun et al 2020;Zahra et al 2021).…”

“…Indeed, one of the most important sustainability indicators in today's world is the EFP, together with the green economy (Zahra et al 2021). The EFP is an effective tool to measure the impact of human consumption on nature and the resources needed to meet human needs (Sun et al 2020;Zahra et al 2021). However, economic globalization has strengthened the ties between countries and has caused the EFP of each country to change by exporting the pressure on the environment from the consumer country to the exporting country that supplies goods and services to this country (Sun et al 2020).…”

Assessing the asymmetric impact of physical infrastructure and trade openness on ecological footprint: An empirical evidence from Pakistan

“…Increase in pollution results from productivity expansion and economic growth has a detrimental impact on environmental deterioration and climate change [ 11 ]. Because it covers built-up land, CO 2 emissions, agricultural land, fisheries, pastures, and forest products [ 1 ], the ecological footprint is a more comprehensive assessment or measure than the CO 2 emission which is formerly employed as an environmental proxy most of the time [ 12 , 13 ]. The ecological footprint method is being used to estimate the overall human burden on natural ecosystems as a first approximation (Lin et al, 2015; Lin et al, 2018; Ghiţă [ 14 ]; Ullah & Khan, 2020), but with some recognized disadvantages [ 15 , 16 ].…”

“…Finally, most previous studies have used carbon dioxide (CO 2 ) emissions as a proxy to capture environmental degradation; this study used the ecological footprint as a proxy for environmental quality. Therefore, the ecological footprint measured in global hectares (gha) is the best proxy for environmental quality compared to carbon dioxide (CO 2 ) emissions [ 8 , 13 , 17 , 18 , 21 , 44 , 55 – 63 ].…”

The Effects of Environmental Tax On Ecological Footprint and Carbon Dioxide Emissions: a Nonlinear Cointegration Analysis On Turkey

“…Indeed, one of the most important sustainability indicators in today's world is the EF, together with the green economy (Zahra et al 2020). The EF is an effective tool to measure the impact of human consumption on nature and the resources needed to meet human needs (Sun et al 2020;Zahra et al 2021). However, economic globalization has strengthened the ties between countries and has caused the EF of each country to change by exporting the pressure on the environment from the consumer country to the exporting country that supplies goods and services to this country (Sun et al 2020).…”