Nexus of co2 emissions and economic growth in pakistan: analysis by using extended stirpat model

Abstract

The main purpose of this study is to analyze the relationship between economic growth (GDP per capita) and CO2 emissions in Pakistan. This study applies the theoretical framework of Dietz and Rosa’s STIRPAT Model, widely used for assessing the environment quality. The additional major determinants of CO2 emissions introduced by the extended STIRPAT model include total energy use, Industry, value-added, financial development, trade openness, and urban population. The empirical results reveal that; total energy use has a positive and significant relationship with CO2 emissions. The relationship between GDP and CO2 emissions is positive and insignificant in the country. Industry, value-added has an insignificant relationship with CO2 emissions in the country. The urban population has a direct and positive relationship with CO2 emissions. Trade openness has a long-run positive and significant relationship with CO2 emissions in the country. In general, this case study offers a relevant policy for controlling the enhancement in the CO2 emissions in the selected sample unit; Pakistan, and other similar states that possess the same socio-economic condition.