Impact of Fossil Fuel, Renewable Energy, and Public-Private Partnership Investments on Sustainable Growth and Carbon Emissions in Pakistan

Abstract

This paper examines the longer-term and causal impact of public-private partnership (PPP) investment in energy and technological innovation on consumption-based carbon emissions in Pakistan during the period from 1990 to 2023. This analysis includes important covariates, such as international trade (exports and imports), economic growth (GDP), and renewable energy consumption, to explore the factors influencing Pakistan's carbon emissions. The theoretical lens for the study is based on the Environmental Kuznets Curve (EKC) theory, which posits that economic growth can initially lead to rising carbon emissions, but stronger long-term technological development and a transition towards renewable energy would turn the tide against environmental degradation. Moreover, Transition Theory emphasizes the importance of PPPs and technological innovation in transitioning Pakistan's energy system from fossil fuels to sustainable energy solutions. By employing advanced estimation techniques, including the Maki cointegration test (1996) that accounts for multiple structural breaks, the research shows that the variables in question are bound in a long-run equilibrium relationship. An export and consumption of renewable energy indicate significantly reduced consumption-based carbon emissions, while more imports, GDP, and (PPP) investment in non- renewable energy positively relates to increased emissions according to results for 182 countries. Overall, the study presents solid empirical proof that trade, technological changes, and a move toward renewable energy can help lower carbon emissions in Pakistan. The authors further recommend the establishment of policies to promote renewable energy investments via PPPs, foster technological progress in low-carbon technologies, implement carbon pricing instruments, such as taxes on energy-intensive goods, and harmonize trade policies to promote low-carbon exports"