Do green finance and energy prices unlock environmental sustainability in Pakistan? Fresh evidence from <scp>RALS</scp>‐<scp>EG</scp> cointegration

Abstract Even in the face of daunting challenges like climate change in Pakistan, every small step towards conservation and sustainability is a beacon of hope for a brighter, environmental quality. Thus, this study assesses the effect of green financing, economic growth, human capital, oil price, gas price and technological innovation on Pakistan's carbon dioxide emissions. The Residual Augmented Least Square‐Engle and Granger (RLAS‐EG) cointegration is performed to evaluate the effective long‐term association among variables and the Autoregressive Distributed Lag (ARDL) model to assess the coefficients. The results indicate that green finance, human capital and oil prices decrease carbon emissions in both the short and long term. Economic growth and increases in gas prices contribute to long‐term effects, whereas economic expansion decreases carbon emissions in the near term. The outcomes suggest endorsing policies that facilitate sustainable economic growth, enhance the uptake of environmentally friendly investments, foster technical advancements and bolster resilience against catastrophic events as measures to address climate change and mitigate CO 2 emissions in Pakistan.