THE EFFECTS OF ECONOMIC, TECHNOLOGICAL, AND INSTITUTIONAL FACTORS ON THE CO2 EMISSIONS IN PAKISTAN USING ARDL APPROACH

Abstract

This research examines the relationships among economic, technological, and institutional factors and CO2 emissions in Pakistan. It uses Autoregressive Distributed Lag (ARDL) bounds testing approach to obtain long- and short-run results by using data from from1995 to 2024. The results showed that GDP per capita increases CO2 emissions (consistent with the first half of the Environmental Kuznets Curve (EKC) Hypothesis while trade openness (TO) significantly reduces emissions. Moreover, foreign direct investment (FDI) also increases CO2 emissions which confirming the Pollution Haven Hypothesis (PHH) for Pakistan. Based on these findings, the study proposes trade and FDI should focus on environmentally sustainable, technology-intensive activities, supported by stronger environmental institutions to reduce CO2 emissions in Pakistan.