ROLE OF GREENHOUSE GAS AND HUMAN DEVELOPMENT INDICES IN THE ECONOMIC GROWTH OF PAKISTAN

Abstract

The purpose of this study was to evaluate the role of Greenhouse Gas and Human Development Indices in the economic growth of Pakistan during 2000-2020. To do so, a greenhouse gas Index has been generated by combining the production and consumption side pollution indices. The collected data of this study on human development index and greenhouse gases has been obtained from the World Bank and UNDP websites. Johanson Cointegration and Vector Error Correction Model was applied. The study concluded a relationship between the economic growth and Human Development Index (HDI) and the Greenhouse Gas Index (GHGI). The results of the VECM suggest that in case of Pakistan, there is a long run causal relationship among the variables i.e. in the long run the economic growth is accompanied by the greenhouse gases. The rising amount of GHGs affects the HDI negatively as suggested by the Johanson cointegration test. But the results does not mean that countries should stop development rather they should promote sustainable economic growth. Therefore, to make the economic growth more sustainable policy makers must promote and devise policies which may reduce the environmental pollution while achieving higher economic growth.