Analyzing the Impact of Urbanization on Carbon Dioxide Emissions: Fresh Evidence from Pakistan

Over several decades, unplanned urbanization is increasing CO2 emissions due to higher energy demand from industrial activities, transportation, and waste management. The present study assesses the link between urbanization and CO2 emissions in Pakistan from 1985 to 2020 by controlling FDI, access to electricity, and institution quality. The empirical results are estimated by using the ARDL approach while causality is extracted through the Granger Causality test. The empirical findings depict that urbanization leads to CO2 emissions. Furthermore, institutional quality declines CO2 emissions, while FDI and access to electricity significantly increase CO2 emissions. The Granger Causality results indicate a bidirectional causality between electricity access and CO2 emissions. At the same time, CO2 emissions and urbanization show unidirectional causality. The study suggests that Pakistan needs to promote an environment-friendly energy consumption pattern