The asymmetric impact of public–private partnership investment in energy on CO 2 emissions in Pakistan

Abstract

The present study investigates the effect of public–private partnership investment in energy and renewable energy consumption on carbon dioxide (CO₂) emissions, taking into account the critical role of economic growth and trade openness in Pakistan from 1992 to 2019. The linear and nonlinear autoregressive distributed lag models are employed to check the co-integration link between dependent and independent variables, further estimate short-run and long-run associations, and examine the symmetric and asymmetric effects of public–private partnership investment in energy on CO₂ emissions in Pakistan. The empirical findings show that public–private partnership investment in energy reduces environmental quality by increasing CO₂ emissions. Similarly, economic development and trade openness harms the atmosphere by raising CO₂ emissions. On the other hand, renewable energy consumption significantly negatively affects CO₂ emissions. In addition, the findings also authenticate the asymmetric link between public–private partnership investment in energy and the environment, as CO₂ emissions are caused mainly by positive shocks in public–private partnership investment in energy in the short and long run. This study proposes financing renewable energy projects through public–private partnership is needed for an environmentally friendly future.