Impact of Financial Development and Energy Consumption on CO2 Emissions: Evidence from Pakistan

Abstract

This study is an attempt to investigate the impact of financial development, energy consumption, trade and

economic growth on CO2 emissions in Pakistan over the period of 1980 to 2015. We have used augmented dickey

fuller (ADF) unit root test and auto regressive distributed lag (ARDL) bounds testing co-integration approach.

The results of ARDL bound F-stat indicate that there is a long run relationship between CO2 emissions, capital,

trade, energy consumption, financial development and economic growth. The long run empirical findings show

that energy consumption, financial development, economic growth and trade are the increasing factors of carbon

dioxide emissions.