Factors determining water stress: do environmental distress, energy consumption and industrialization matter?

This study is directly aligned with UN Sustainable Development Goal 06, which aims to “Ensure access to water and sanitation for all.” The primary objective of our research is to empirically assess the factors that contribute to water stress, with a particular emphasis on the role of environmental degradation/distress, such as CO2 emissions and ecological footprint, as well as energy consumption (both renewable and non-renewable) and industrialization in Pakistan (1975–2020). To ensure the accuracy of our findings and avoid any potential misspecification of the empirical model, we have included additional key regressors. Furthermore, we have adopted a comprehensive empirical strategy that takes into account the time-series nature of the data, employing various techniques such as unit root tests, autoregressive distributed lag (ARDL), Fully Modified Ordinary Least Squares, Dynamic OLS, and Granger causality analysis. The ARDL analysis reveals that environmental degradation (CO2 emissions and ecological footprint), non-renewable energy use, and industrialization, positively contribute to water stress. Conversely, renewable energy use, rainfall, forest area, and temperature have a negative impact on water stress. These findings suggest that the government of Pakistan should implement effective regulatory policies to control environmental degradation, develop robust water infrastructure, and promote water conservation awareness to address the water stress issue in the country.