Investigating the Validity of the Agricultural-Induced Environmental Kuznets Curve (EKC) Hypothesis for Pakistan: Evidence from Autoregressive Distributed Lag (ARDL) Approach with a Structural Break

  • Rabia Mazhar College of management, Sichuan agricultural university, Chengdu 611130, China
  • Houjian Li College of economics, Sichuan agricultural university, Chengdu 611130, China
  • Gideon Ntim-Amo College of management, Sichuan agricultural university, Chengdu 611130, China
  • Abdul Saboor Dean Faculty of Social Sciences, PMAS Arid Agriculture University, Rawalpindi, Pakistan
  • Ayesha Ali School of economics and finance, Queen Mary University of London, Mile End Rd, Bethnal Green, London E1 4NS
Keywords: GDP, GDPSQ, Carbon dioxide emissions, AGRIC, Energy consumption, EKC hypothesis, Structural break, ARDL model, Causality

Abstract

The objective of this study is to check the feasibility of the agriculture-induced EKC hypothesis for Pakistan from 1971 to 2014 using findings from an autoregressive distributed lag (ARDL) technique with a structural break that includes real income and energy consumption in the model.The agriculture-induced EKC model was studied using the autoregressive distributed lag (ARDL) technique, which has never been explored before in Pakistan.The direction of relationship between the research factors was explained with Toda-Yamamoto Granger Causality test. Real gross domestic product per capita and square of real gross domestic product per capita  all have significant positive effects on carbondioxide emissions, while square of real gross domestic product per capita reduces carbondioxide emissions, according to the ARDL findings. The results of the Toda-Yamamoto causality test reveal a long-run unidirectional causation exists between real gross domestic product per capita, square of real gross domestic product per capita and long-run carbondioxide emissions. The long-run unidirectional causal relationship between agricultural value added, square of real gross domestic product per capita  and real gross domestic product per capita and bidrectional long-run causal link between energy consumption and real gross domestic product per capita. The presence of the agriculture-induced EKC hypothesis in Pakistan in the short and long run was substantiated by the bidirectional and unidirectional causal links between the two variables and real gross domestic product per capita. As a result, special strategies to increase Agricultural sector quality in Pakistan are proposed to reduce unsustainable agricultural practices in preparation for a worldview transition from primitive technology to modern sustainable agrarian technologies.This work is unique in the EKC literature in Pakistan since no other study on agriculture-induced EKC in Pakistan and other EKC studies have failed to account for structural fractures, as this study has done. This study also contains a causality analysis to look into the direction of the link, which is something that the few EKC studies in Pakistan haven't investigated into.

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Published
2022-05-29
How to Cite
Mazhar, R., Li, H., Ntim-Amo, G., Saboor, A., & Ali, A. (2022). Investigating the Validity of the Agricultural-Induced Environmental Kuznets Curve (EKC) Hypothesis for Pakistan: Evidence from Autoregressive Distributed Lag (ARDL) Approach with a Structural Break. International Journal of Sciences: Basic and Applied Research (IJSBAR), 62(2), 196-234. Retrieved from https://gssrr.org/index.php/JournalOfBasicAndApplied/article/view/14035
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Articles