DefinePK

Research Objective

To investigate how financial inclusion (FINC), FDI, trade openness (TO), and economic growth (GDP) affect Pakistan's CO2 emissions and ecological footprint from 2004 to 2021.

Methodology

Autoregressive distributed lag (ARDL) modeling was used to analyze time series data from 2004 to 2021. CO2 emissions and ecological footprint were the dependent variables, while financial inclusion, FDI, trade openness, and GDP were the independent variables.

Methodology Flowchart

                        graph TD
    A["Data Collection 2004-2021"] --> B["Variable Definition: CO2, EF, FINC, FDI, TO, GDP"];
    B --> C["Model Specification"ARDL""];
    C --> D["Estimation of Long-Run and Short-Run Coefficients"];
    D --> E["Diagnostic Tests"];
    E --> F["Interpretation of Results"];
    F --> G["Conclusion and Policy Recommendations"];                    

Discussion

The findings suggest that enhancing trade and financial inclusion is crucial for Pakistan to sustain environmental quality. Funds from financial institutions should be directed towards clean and green energy projects and eco-innovations. While FDI and GDP contribute to economic growth, they also lead to increased CO2 emissions, necessitating strict environmental regulations and the redirection of FDI into clean energy sectors.

Key Findings

In the long run, financial inclusion and trade openness have a negative influence on CO2 emissions. Financial inclusion has a beneficial effect on the environment, reducing its negative impact and improving environmental quality. FDI and GDP have a positive impact on CO2 emissions but a negative impact on the ecological footprint.

Conclusion

Financial inclusion and trade openness act as environmental purifiers by abating CO2 emissions in Pakistan. Conversely, FDI and GDP contribute to environmental deterioration by increasing CO2 emissions. The study emphasizes the need for Pakistan to strengthen trade and financial inclusion policies to improve environmental quality, while implementing stringent regulations to mitigate the negative environmental impacts of FDI and GDP growth.

Fact Check

1. Time Period: The study analyzes data from 2004 to 2021. (Confirmed in the abstract and methodology).
2. Methodology: Autoregressive distributed lag (ARDL) modeling is used. (Confirmed in the abstract and methodology).
3. Key Variables: The study examines the impact of financial inclusion, FDI, trade openness, and GDP on CO2 emissions and ecological footprint. (Confirmed in the abstract and methodology).

Mind Map