Asymmetric nexus between commercial policies and consumption-based carbon emissions: new evidence from Pakistan

Abstract The current study extends the previous literature by exploring effects of a newly discovered driver, i.e., import taxes (as proxy for commercial policies), on consumption-based carbon emissions (CCO2e) 1990Q1-2017Q4. For empirical analysis, several tests and methods, including Augmented Dickey–Fuller unit root test, Zivot–Andrews asymmetric cointegration bound testing approach, non-linear ARDL, Wald-test, Granger causality test wavelet quantile correlation (WQC) method are utilized. Furthermore, NARDL technique estimates reveal that contractionary policy enhances environmental quality disrupting detrimental CCO2e. However, expansionary escalates pollution boosting emissions. Also, exports renewable energy improve ecological quality; however, GDP deteriorates atmospheric increasing Besides, WQC trivariate deployed to confirm robustness results. Based findings, some crucial policies also recommended sustainable green development in Pakistan.