Exploring the Relationship Between Environmental Degradation and Economic Development in Pakistan

Abstract

Environment plays an important role in to effect of economic growth in Pakistan. To determine if the data are stationary, the test of unit roots is used and ARDL (Auto regressive distributive lag model) techniques on the data for the period from 1989 to 2020. In our study, the dependent variable is economic growth and the independent variables are environment, population growth, foreign direct investment, gross fixed capital formation and trade openness in Pakistan. Overall, the main results show that the environment positively affects economic growth. foreign direct investment, trade openness and gross fixed capital formation also have a direct impact on economic growth. Our empirical results suggest that the environment plays an important role to increase the economic growth of Pakistan. Findings suggest that the government of Pakistan should pay particular attention to the promote energies to control pollution to boost the economy.