Impact of Foreign Remittance, GDP and Trade Openness on Carbon Dioxide emissions: In Pakistan’s Perspective

Abstract

This study intends to analyze the impact of remittances, GDP and trade openness on CO2 emissions in Pakistan. Annual data is used for 20 years from 1995 to 2014. Data for remittances is collected from the SBP (State bank of Pakistan) and for GDP, TO and CO2 emissions data is taken from WDI (World Bank Indicator). Descriptive analysis, correlation analysis and regression analysis is used for the analysis. The method of least square regression is used to analyze the results of the study. Regression analysis shows that REM and GDP and TO have significant relationship with CO2 emissions. REM and GDP are positively related with CO2 emissions while TO has negative relation with CO2 emissions which indicates that when REM and GDP increases CO2 emissions will also increase and cause environmental deterioration. Conversely, when TO increases CO2 emissions will decrease and do not affect the environmental health. On further investigation through literature, it is assumed that TO does not have a significant effect on CO2, it neither has a positive nor a negative significant impact on environment. This study will help policy makers and researcher to incorporate environmental impact while formulating policies for Remittances and GDP.