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Co2 emission, economic growth, energy consumption and foreign trade in pakistan: causality analysis


  • Muhammad Anees

    () (COMSATS Institute of Information Technology, Attock)

  • Shaukat Amer

    () (COMSATS Institute of Information Technology, Attock)

  • Ishfaq Ahmed

    () (COMSATS Institute of Information Technology, Attock)


The alarming increase in global warming in the last century resulted in an intensive debate over issues of environmental degradation due to rapid economic growth on the basis of intensive utilization of the natural resources of the world economy. The literature is exhaustive on these issues and the underlying study fills the gap in literature by producing evidence in context of a relatively underdeveloped, open in context of international trade and significantly contributing to total global emissions, Pakistan. The analysis is conducted using annual data from the World Development Indicators on Carbon Dioxide emission, economic growth, consumption of energy and openness for foreign trade from 1972 to 2007. Following Toda and Yamamoto (1995), augmented Vector Autoregression technique is implemented to test Granger causality. The results indicate that gross domestic product significantly Granger causes emission of Carbon Dioxide, energy consumption and foreign trade. It is also evident that energy consumption unidirectional Granger causes emission of Carbon Dioxide. The existence of causal relationships has implications for implementing effective policies to control alarming increases in emission of contaminate gases and contribute to conserve global environment.

Suggested Citation

  • Muhammad Anees & Shaukat Amer & Ishfaq Ahmed, 2011. "Co2 emission, economic growth, energy consumption and foreign trade in pakistan: causality analysis," Economics Bulletin, AccessEcon, vol. 31(3), pages 1-33.
  • Handle: RePEc:ebl:ecbull:eb-11-00481

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    Cited by:

    1. Nasreen, Samia & Anwar, Sofia & Ozturk, Ilhan, 2017. "Financial stability, energy consumption and environmental quality: Evidence from South Asian economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1105-1122.

    More about this item


    Pakistan; Carbon Dioxide emission; Energy Consumption; Economic Growth; Foreign Trade.;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics


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