Role of Smart Transportation in Reducing Carbon Emissions and Enhancing Green Total Factor Productivity in Pakistan: New Insights from NARDL Approach

Purpose: Smart transportation systems can mitigate environmental degradation while supporting sustainable economic growth amid rising global climate change and carbon emissions. This issue is particularly important for developing countries such as Pakistan, where reducing emissions and improving productivity are key policy priorities. This study addresses this gap by examining the asymmetric impact of smart transportation on green total factor productivity (GTFP) in Pakistan from 1991 to 2023. Design/Methodology/Approach: To this end, nonlinear autoregressive distributed lag (NARDL) estimation method is used that breaks down the smart transportation into positive and negative changes. We also use three mediators, energy consumption, industrial development and urban population- to examine their functions in this relationship. Findings: The results show that smart transportation can increase tremendously green total factor productivity (GTFP) in Pakistan in the long term. This effect is mediated by development of energy usage, industrial output and urban population increase. The findings also revealed something one-sided implying that positive shocks in smart transportation have significant effects on GTFP. Implications/Originality/Value: This paper highlights how smart transportation asymmetrically boosts green total factor productivity and reduces carbon emissions in Pakistan, offering policy insights on energy, industry, and urbanization for sustainable growth.