Examining the Impact of Financial Inclusion, Tourism and Renewable Energy on Environmental Sustainability: Evidence from NARDL Approach
DOI:
https://doi.org/10.52461/sabas.v6i1.3105Keywords:
Financial Inclusion, Tourism, Renewable Energy, GDP, Environmental sustainability, EKC TheoryAbstract
This paper aims at examining the effects of financial inclusion, renewable energy, tourism and economic growth on the environmental stability in Pakistan. It uses the Nonlinear Autoregressive Distributed Lag (NARDL) and Environmental Kuznets Curve (EKC) hypothesis. The goal of the study to uncover the non-linear relationship and long-run co-movement between such variables which spans through 2000-2023. Financial inclusion emerges as a critical factor, consistently reducing emissions in both the short and long run, with negative shocks having a more pronounced effect. The findings highlight the EKC pattern, where economic growth initially increases emissions, but beyond a certain point, further growth reduces them, signaling a transition toward environmental improvement. Renewable energy consumption plays a crucial role in lowering emissions, while tourism slightly increases them. The findings of this study can be useful for policy makers as this study also emphasized the fact that for the sustainability in Pakistan there is need to encourage financial commensurate with the need for green economy through sustainable tourism and renewable energy for the improved environmental sustainability.
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