Investigating the Linkages: Energy Consumption, Institutional Quality, and Environmental Quality in Pakistan
Abstract
Environment-related issues are always caused by using several kinds of energy resources that are used for production processes and economic growth and development. This study focused on examining the role of institutional quality and energy consumption on environmental quality in Pakistan by using data ranging from 1998 to 2022. In this study, we have used the ARDL method to analyze the relationship between independent and dependent variables. The results demonstrate the positive relationship between energy consumption and environmental quality, suggesting that efforts to boost energy efficiency and switch to cleaner energy sources might enhance environmental sustainability. Furthermore, there is a positive correlation between environmental indicators like CO2 levels and institutional quality, as determined by metrics like political stability, government efficiency, and the absence of violence or terrorism. This implies that improving governance procedures and institutional frameworks may contribute to better environmental outcomes. Furthermore, as efficient governance positively affects energy consumption, particularly oil and fossil fuel resources, it is essential for energy management. To address environmental problems and promote sustainable development in Pakistan, a multifaceted approach is needed. First and foremost, reforms must be implemented to enhance political stability and the efficiency of the administration. This necessitates improving governance structures, streamlining regulatory processes, and promoting transparency and accountability in decision-making. It is best to implement policies that promote the use of renewable energy sources and boost energy efficiency at the same time. This can include offering tax incentives or subsidies for renewable energy projects in addition to mandating the use of energy-efficient equipment in homes and businesses. In addition, it is imperative to uphold environmental sustainability and encourage business transparency.
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