A Long-Term Analysis of the Relationship between CO2 Emissions, Patents, and Fossil Fuel Pricing: A Case Study of Pakistan
Keywords:
CO2 Emissions, International Oil Prices, International Gas Prices, Patents, GEL Classification, P18, Q48, Q54, Q56, R11Abstract
This study examines the patterns of CO2 emissions in Pakistan and how they relate to the pricing trends of the main fossil fuels (oil and natural gas) and the number of patents. With the aid of econometric approaches, the time series data from 1976 to 2020 is estimated, and a unit root test is carried out to confirm data stationarity. The study uses panel co-integration models to examine the long-term correlation between oil prices, natural gas prices, the number of patents, and CO2 emissions. The findings demonstrate an important, long-term link between oil and natural gas prices, the quantity of patents, and CO2 emissions. Besides, the long-term link between CO2 emissions, the cost of fossil fuels, and patents is quadratic. The results of the Johansen co-integration analysis indicate both a short and long-term causal relationship between CO2 emissions and oil/gas prices. According to the current study, increasing the number of patents and boosting the price of oil and natural gas may help Pakistan lower its CO2 emissions, which greatly impacts the country's ability to meet its climate-related sustainable development goals.
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