Physical infrastructure, energy consumption, economic growth, and environmental pollution in Pakistan: an asymmetry analysis

Abstract

This study explores the symmetric and asymmetric effects of physical infrastructure on energy consumption, economic growth, and air pollution of Pakistan over the period 1990–2019. The ARDL results for the energy consumption model suggest that aircraft carriers (ACC) and road infrastructure foster energy consumption in the short term. For the growth model, the impact of trade is negative and significant in both short run and long run. The results for environmental pollution model suggest that information communication technology (ICT) is positively associated with CO2 emissions, whereas trade is negatively associated with emissions in the short and long run. The road has a positive impact on CO2 emissions while ACC has a negative impact in the long run. The nonlinear ARDL results reveal that negative component of ICT negatively influences energy consumption, while positive component has insignificant impact. Similarly, ACC, road, and trade also exhibit asymmetric effects. ICT has a significantly negative impact on economic growth. Finally, the positive shock to road has a significantly positive impact on pollution but the negative shock has no impact. Additionally, the coefficient of ACC and trade also infer asymmetries in pollution model. The results offer important policy implications for achieving high growth and better environmental quality in Pakistan.