Does Urbanization Impede Environmental Sustainability? Panel Data Evidence from South Asia

Abstract

Climate change and global warming are burning issues in present era and urbanization can be a factor of carbon dioxide emission expansion which erodes environment quality. Considering rapid urbanization in South Asia during last few decades, this study examines the association between urbanization and CO₂ emission. Panel data time series econometric techniques such as; panel DOLS, FMOLS and granger causality are applied by using panel data for 1973-2018. The results show that urbanization increases CO₂ emission in the long run and this finding is also supported by the results of individual country based analyses. Moreover, unidirectional causal linkage from urban expansion to carbon dioxide emission and from energy consumption to carbon emission prevail. Important policy implications are proposed based on the findings. Energy efficient urban public transportation facilities, industrial emission abatement policies, awareness of masses through media etc. can help to reduce carbon emission whereas provision of social amenities in rural areas can lead to ease press of human movement towards urban areas.