Evaluating the nexus between ongoing and increasing urbanization and carbon emission: a study of ARDL-bound testing approach

The growing urbanization has created a substantial economic imbalance between the urban and rural households in the world's emerging economies and put a significant effect on carbon dioxide emissions. Simultaneously, many researchers have grown concerned by the significant consequences of urbanization on carbon emissions. In current research, we make an effort in Pakistan to investigate how urbanization affects the carbon emissions. In order to attain the intended goals of long run and short run investigation, we employed the most appropriate method of auto-regressive distributed lag model for time series data-set, while the vector error correction model, on the other hand, was employed to investigate causation. The estimated findings of the auto-regressive distributed lag model supported the association amongst the model's selected variables. In long and short run, the estimated findings approved that as the level of urbanization rises, so does the carbon emissions. Furthermore, the estimated results of the vector error correction model acknowledged the validity of short run unidirectional causal relationship from urbanization towards carbon emissions and from carbon emission towards energy consumption, as well as in short run, where economic growth one-way Granger generates the carbon emission. To summarize, based on the current findings, that reflects the significance of the underlined factors. The study recommends that government should prioritize the development of energy efficient and environment friendly strategies with respect to fast growing urbanization to control the carbon emission.