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Does Energy-Growth and Environment Quality Matter for Agriculture Sector in Pakistan or not? An Application of Cointegration Approach

1
College of Economics, Sichuan Agricultural University, Chengdu 611130, China
2
School of Economics and Management, Southeast University, Nanjing 211189, Jiangsu, China
3
College of Management, Sichuan Agricultural University, Chengdu 611130, Sichuan, China
4
School of Economics, Lanzhou University, Lanzhou 730000, Gansu, China
*
Authors to whom correspondence should be addressed.
Energies 2019, 12(10), 1879; https://doi.org/10.3390/en12101879
Received: 14 March 2019 / Revised: 9 May 2019 / Accepted: 12 May 2019 / Published: 16 May 2019
(This article belongs to the Special Issue Assessment of Energy–Environment–Economy Interrelations)
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Abstract

The main objective of this paper is to examine the long-term effects of financial development, economic growth, energy consumption (electricity consumption in the agriculture sector), foreign direct investment (FDI), and population on the environmental quality in Pakistan during the period of 1980 to 2016. We use CO2 emissions from the agriculture sector as a proxy indicator for environmental quality. We employ various unit root tests (e.g., ADF, PP, ERS, KPSS) and structural break unit root tests (Z&A, CMR) to check the stationarity and structural break in the data series. Cointegration tests, i.e., Johansen, Engle-Granger, and ARDL cointegration approaches are used to ensure their robustness. Results showed that significant long-term cointegration exists among the variables. Findings also indicated that an increase in financial development and foreign direct investment (FDI) improves environmental quality, whereas the increase in economic growth and electricity consumption in the agriculture sector degrades environmental quality in Pakistan. Based on the findings, we suggest policymakers should provide a conducive environment for foreign investment. Moreover, it is also suggested that a reliance on fossil fuels be reduced and a transition to renewable energy sources be encouraged to decrease the environmental pollution in the country. View Full-Text
Keywords: financial development; carbon emissions; energy consumption; environment quality cointegration; Pakistan financial development; carbon emissions; energy consumption; environment quality cointegration; Pakistan
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Chandio, A.A.; Jiang, Y.; Rauf, A.; Mirani, A.A.; Shar, R.U.; Ahmad, F.; Shehzad, K. Does Energy-Growth and Environment Quality Matter for Agriculture Sector in Pakistan or not? An Application of Cointegration Approach. Energies 2019, 12, 1879.

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