Navigating Environmental Sustainability in Pakistan: The Roles of Energy Poverty, Economic Growth, and Foreign Investment

The purpose of this study is to check the impact of energy poverty and economic growth on the ecological footprint in Pakistan, with specifically consideration to the role of institutional quality and foreign direct investment. For the analysis of this study utilizes annual time series data spanning from 2001 to 2023, collected from the World Development Indicators (WDI) and the Global Footprint Network. The ecological footprint is the dependent variable, while energy poverty, economic growth, institutional quality, and FDI assist as independent variables. To measure the stationarity of the data, the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests are employed, revealing a mixed order of integration. Consequently, the Autoregressive Distributed Lag (ARDL) technique is applied to calculate both short and long-run relationships among the variables. The short-run outcomes indicates that energy poverty and institutional quality negatively affect the EF, whereas economic growth and FDI exert a positive influence. Notably, although FDI shows a positive short-run effect, it is negatively correlated with the ecological footprint. In the long run, energy poverty and institutional quality continue to have a negative impact, while economic growth and FDI contribute positively to the ecological footprint. These findings highlight the complex interplay between development factors and environmental sustainability in Pakistan.