Globalization and CO 2 emissions nexus: evidence from the EKC hypothesis in South Asian countries

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RESEARCH ARTICLE

Globalization and CO2 emissions nexus: evidence from the EKC hypothesis in South Asian countries Usman Mehmood 1

&

Salman Tariq 2

Received: 13 April 2020 / Accepted: 16 June 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020

Abstract In the last few decades, developing countries continued to increase their manufacturing industries’ phenomenal growth rate. Due to the emergence of globalization, these developing countries are getting economic growth at the cost of environmental pollution. In this context, the extent of linkages between globalization and carbon dioxide (CO2) emissions has been investigated over the time period of 1972–2013 in South Asian countries. The econometric and graphical analyses are found U-shape association between globalization and CO2 emissions in Nepal, Afghanistan, Bangladesh, and Sri Lanka, and an inverted U-shape relationship is observed in Pakistan and Bhutan. Moreover, results have shown that there exists a bi-directional causality between globalization and CO2 emissions in Pakistan, Bangladesh, and Nepal. This indicates that globalization is increasing CO2 emissions and CO2 emissions impact globalization by economic growth. However, after some threshold level, globalization is responsible for decreasing CO2 emissions in Pakistan and Bhutan. For the first time, globalization is incorporated in the economic analysis, showing the U-shape and inverted U-shape associations between globalization and CO2 emissions. This study suggests some strong policy recommendations to consider globalization as cost-effective tool to achieve sustainable economic growth in South Asian countries. Keywords Globalization . CO2 emissions . South Asia . EKC

Introduction The role of globalization has been greatly acknowledged all over the world in terms of supporting industrial evolution, expansion and ease of doing business, and mitigating migration by enhancing trade at global level. Also, globalization helps developing countries to boost their economic growth by reducing the major problems of poverty, income inequality, and unemployment. The boost in economic growth is ultimately linked with increased energy demand mostly fulfilled by fossil fuels consisting of coal, petroleum, natural gas, Responsible Editor: Nicholas Apergis * Usman Mehmood [email protected] 1

Department of Political Science, University of Management and Technology, Lahore, Pakistan

2

Remote Sensing and GIS Group, Department of Space Science, University of the Punjab, Lahore, Pakistan

etc (Adom 2011). The economic development and industrialization largely based on energy utilization give rise to carbon dioxide (CO2) emissions. An elevated concentration of CO2, a strong greenhouse gas and a major climate change indicator, in the earth’s atmosphere is harmful environmental feature. The climatic change and environmental degradation, mostly linked to increased CO2 emissions, significantly contribute to ecological imbalances. As a result of climate variability, the human socio-economic life is

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