Impact of Income Inequality and Population Density on Carbon Emissions in Pakistan

Abstract

This research inspects the consequence of the contribution of income inequality towards CO₂ and the role of the urban population in the case study of Pakistan. The purpose of this study is to assess the influence of the high population density of Pakistan and income inequality on carbon emanations. The current study employed statistics of time series of the years from 1985 to 2020 by applying the approach of ARDL bounds testing to achieve this goal. Empirical results for the carbon emissions confirm the occurrence of a long-run co-integration relationship between population density and income inequality. The results of the error-correction visualization of the ARDL model indicate that all predictors and their lagged values influenced the dynamics of CO2 emissions in Pakistan from 1985 to 2020. The outcomes of the current study specify that there is a direct relationship between carbon emission and inequality of income, population density, GDP, GDP square, and urban population. The estimated results specify that as the contribution of low-income groups rises in Pakistan the emission of carbon also rises. This study also confirms that increasing population density will increase carbon emissions. The observed outcomes of this research offer policy implications that should focus on providing subsidies for clean energy to diverse groups, especially in urban areas.