Validation of environmental Philips curve in Pakistan: a fresh insight through ARDL technique

The tremendous increase of greenhouse gases puts adverse effects on environmental degradation, unemployment, and economic growth. Against this backdrop, and implementing the more recent estimation approach, the present study investigates the validity of the novel environmental Phillips curve (i.e., inverse relationship between unemployment and environmental degradation) carried by Kashem and Rahman (2020). The unique contribution of this research is to examine the three environmental indicators (CO₂, CH₄, and ecological footprint) as a dependent variable with the same independent variables, i.e., unemployment rate, energy consumption, economic growth, foreign direct investment, and globalization, from 1975 to 2014 in Pakistan. The results validate a negative relationship of unemployment rate with CO₂, CH₄, and ecological footprint in the long run that proves the existence of environment Philips curve for Pakistan. However, a positive association is observed for energy consumption and CO₂, CH₄, and ecological footprint. The positive connection of energy consumption and environmental indicators determined that not only CO₂ emissions rather CH₄ and ecological footprint play an equal role in environmental degradation. Furthermore, in the long run foreign direct investment improves environmental sustainability for CO₂, and ecological footprint thus proved the pollution halo hypothesis for Pakistan. Probing the effects of globalization that badly pollutes environmental sustainability. Therefore, the policymakers should focus on innovations and technological improvements to contemplate both environmental degradation and unemployment. There is a need for sudden actions for energy consumption plans in Pakistan for the nation's health, economic growth, and environmental sustainability.