Nexus of Natural Resources, Renewable Energy and Environment in Pakistan : A Policy Perspective

The consecutive rises in the consumption of energy to attain economic growth have accelerated the extraction of natural resources, which have substantiated investments in green technology to pivot sustained economic growth. Therefore, the roles of natural resources (NRs) and renewable energy (RE) remain significant constructs to be used in examining environmental quality. Accordingly, by applying the standard “(Stochastic Impact by Regression on Population, Affluence, and Technology)” STIRPAT model this paper explores the interrelationships between RE, NRs, and the mediating role of GDP on the nexus between NRs and RE to the environment in Pakistan between 1990 and 2018. Estimates of Fully Modified Ordinary Least Squares (FMOLS) and Canonical Cointegrating Regression (CCR) indicate that RE reduces CO2 emissions and ecological footprints, while NRs reduce CO2 emissions and increase ecological footprints. Furthermore, economic growth is positively correlated with CO2 emissions and EFP. In addition, GDP moderates the nexus of NRs-CO2, and RE-CO2 emissions positively, but negatively with EFP. The study also emphasizes the need to consider the mediating role of GDP concerning NRs and RE to ensure environmental quality and to develop important policies for the environment