A New Economic Dimension to the Environmental Kuznets Curve: Estimation of Environmental Efficiency in Case of Pakistan

This study attempts to examine the linkage between environmental degradation and economic growth in Pakistan over the period 1972-2011. The main concern of this study is to test the validity of Environmental Kuznets Curve in case of Pakistan and aims to find out the total and per capita carbon efficiency of Pakistan. Moreover, this study estimates the tipping point of environmental Kuznets curve in case of Pakistan. The study used Autoregressive Distributed Lag (ARDL) model to determine the robustness of long-run relationship among environmental degradation and economic growth. The results show that the inverted U-shaped relationship between economic growth and environmental degradation is valid in case of Pakistan. The values of total carbon efficiency for Pakistan is 47.69 and per capita carbon efficiency for Pakistan is 0.0002, which are relatively low as compare to other developing and developed countries like in the region. The Tipping Point of EKC in case of Pakistan is 338.34. This study recommends that government should keep into consideration the sustainable economic policies with environmental policies, as environmental sustainability largely based on the economic conditions and economic policies adopted by the countries.