A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management
This paper explored the energy–environment–economy (EEE) causal nexus of Pakistan, thereby reporting the causal determinants of the EEE nexus by employing the newly developed modified Peter and Clark (PC) algorithm. The modified PC algorithm was employed to investigate the causal ordering of energy...
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/14/17/5495 |
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doaj-6748f2300e5a42f89fcbbd5ee787cf342021-09-09T13:43:44ZengMDPI AGEnergies1996-10732021-09-01145495549510.3390/en14175495A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy ManagementRizwan Fazal0Syed Aziz Ur Rehman1Muhammad Ishaq Bhatti2Atiq Ur Rehman3Fariha Arooj4Umar Hayat5Pakistan Institute of Development Economics (PIDE), Quaid-e-Azam University, Islamabad 44000, PakistanDepartment of Environmental Sciences, University of Veterinary and Animal Sciences, Lahore 54000, Punjab, PakistanDepartment of Economics, Finance and Marketing, La Trobe Business School, La Trobe University, Melbourne, VIC 3083, AustraliaKashmir Institute of Economics, University of Azad Jammu and Kashmir, Muzaffarabad 13100, AJK, PakistanDepartment of Environmental Sciences, University of Veterinary and Animal Sciences, Lahore 54000, Punjab, PakistanDepartment of Economics and Development Studies, University of Swat, Saidu Sharif 19200, Swat, KPK, PakistanThis paper explored the energy–environment–economy (EEE) causal nexus of Pakistan, thereby reporting the causal determinants of the EEE nexus by employing the newly developed modified Peter and Clark (PC) algorithm. The modified PC algorithm was employed to investigate the causal ordering of energy consumption, CO<sub>2</sub> emissions and economic growth across Pakistan’s domestic, industrial, transportation and agricultural sectors. An empirical comparison, i.e., following Monte Carlo simulation experiments demonstrates that the proposed modified PC algorithm is superior to the original PC proposition and can differentiate between true and spurious nexus causalities. Our results show that significant causality is running from energy consumption in industrial and agricultural sectors towards economic growth. There is no causal association between energy consumption and economic growth in the domestic and transportation sectors. On the other hand, causality runs from energy consumption in the transportation, domestic and industrial sectors towards CO<sub>2</sub> emissions. It is concluded that energy consumption in industrial and agricultural sectors leads to economic growth alongside the associated CO<sub>2</sub> emissions. On the other hand, the contribution of domestic and transportation sectors in economic growth is trivial with significant CO<sub>2</sub> emissions. This paper provides novel empirical evidence of impacts of energy mismanagement at sectoral levels, economic output and environmental consequences; alongside policy recommendations for sustainable energy-based development on the national scale.https://www.mdpi.com/1996-1073/14/17/5495CO<sub>2</sub> emissionseconomic growthenergy–environment–economyGraph Theoretic ApproachMonte Carlo simulationsnexus |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Rizwan Fazal Syed Aziz Ur Rehman Muhammad Ishaq Bhatti Atiq Ur Rehman Fariha Arooj Umar Hayat |
| spellingShingle |
Rizwan Fazal Syed Aziz Ur Rehman Muhammad Ishaq Bhatti Atiq Ur Rehman Fariha Arooj Umar Hayat A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management Energies CO<sub>2</sub> emissions economic growth energy–environment–economy Graph Theoretic Approach Monte Carlo simulations nexus |
| author_facet |
Rizwan Fazal Syed Aziz Ur Rehman Muhammad Ishaq Bhatti Atiq Ur Rehman Fariha Arooj Umar Hayat |
| author_sort |
Rizwan Fazal |
| title |
A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management |
| title_short |
A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management |
| title_full |
A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management |
| title_fullStr |
A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management |
| title_full_unstemmed |
A Cross-Sectoral Investigation of the Energy–Environment–Economy Causal Nexus in Pakistan: Policy Suggestions for Improved Energy Management |
| title_sort |
cross-sectoral investigation of the energy–environment–economy causal nexus in pakistan: policy suggestions for improved energy management |
| publisher |
MDPI AG |
| series |
Energies |
| issn |
1996-1073 |
| publishDate |
2021-09-01 |
| description |
This paper explored the energy–environment–economy (EEE) causal nexus of Pakistan, thereby reporting the causal determinants of the EEE nexus by employing the newly developed modified Peter and Clark (PC) algorithm. The modified PC algorithm was employed to investigate the causal ordering of energy consumption, CO<sub>2</sub> emissions and economic growth across Pakistan’s domestic, industrial, transportation and agricultural sectors. An empirical comparison, i.e., following Monte Carlo simulation experiments demonstrates that the proposed modified PC algorithm is superior to the original PC proposition and can differentiate between true and spurious nexus causalities. Our results show that significant causality is running from energy consumption in industrial and agricultural sectors towards economic growth. There is no causal association between energy consumption and economic growth in the domestic and transportation sectors. On the other hand, causality runs from energy consumption in the transportation, domestic and industrial sectors towards CO<sub>2</sub> emissions. It is concluded that energy consumption in industrial and agricultural sectors leads to economic growth alongside the associated CO<sub>2</sub> emissions. On the other hand, the contribution of domestic and transportation sectors in economic growth is trivial with significant CO<sub>2</sub> emissions. This paper provides novel empirical evidence of impacts of energy mismanagement at sectoral levels, economic output and environmental consequences; alongside policy recommendations for sustainable energy-based development on the national scale. |
| topic |
CO<sub>2</sub> emissions economic growth energy–environment–economy Graph Theoretic Approach Monte Carlo simulations nexus |
| url |
https://www.mdpi.com/1996-1073/14/17/5495 |
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