Financial health and economic growth responsiveness as solution to environmental degradation in Pakistan

Golo M. A., Han D., Balsalobre-Lorente D., Radulescu M.

Environmental Science and Pollution Research, vol.31, no.21, pp.31524-31545, 2024 (Scopus)

  • Publication Type: Article / Article
  • Volume: 31 Issue: 21
  • Publication Date: 2024
  • Doi Number: 10.1007/s11356-024-33176-2
  • Journal Name: Environmental Science and Pollution Research
  • Journal Indexes: Scopus
  • Page Numbers: pp.31524-31545
  • Keywords: ARDL bounds testing, Awareness, Environment, Monetary dynamics, Pakistan, Population
  • Open Archive Collection: Article
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

This study analyses the impact of GDP per capita, domestic credit, savings, and population on the environment in Pakistan from 1995 to 2019. The country has consistently been ranked eighth, fifth, and eight as an environmentally vulnerable nation from 1998 to 2017, 1999 to 2018, and 2000 to 2019, respectively. Therefore, the study explores the role of environmental awareness as a potential strategy for making peace with nature. Findings of the ARDL bounds testing approach confirm the long-run cointegration among variables of concern. In further assessment, the study determines that increased per capita income is detrimental to environmental quality in the long run. However, in the short run, it shows a favourable impact. On the other hand, domestic credit worsens the environment in the long and short runs. However, savings are positively insignificant in this regard. Furthermore, the total population significantly harms the environment in the long and short run. Fortunately, environmental awareness has emerged as a key solution to environmental degradation in Pakistan. Findings show that an increase in the dissemination of environmental awareness through the Internet, mobile, and landline phones, as well as by increasing education expenditures, mitigates the populations’ detrimental impact on the environment and improves environmental quality in the long run. Graphical Abstract: (Figure presented.)