Assessing the linkages of economic freedom and environmental quality in South Asian Countries: application of CS-ARDL.

We examine the linkages of economic freedom (ECF), energy use, and CO ₂ emissions in selected South Asian countries of Pakistan, India, Bangladesh, and Sri Lanka. Annual data from 1995 to 2018 are analyzed by employing second-generation methodologies. Cross-sectional autoregressive distributed lag (CS-ARDL) is used because this method incorporates the cross-sectional dependence among the data. This work uses three models, where the dependent variables are gross domestic product (GDP), CO ₂ emissions, and energy use. The findings reveal that ECF and energy use contributes to more economic development. ECF is improving air quality by lowering CO ₂ emissions. The findings suggest that these countries need to increase the percentage of renewable energy in their energy generation mix. At the same time, there is a need to integrate ECF with environmental awareness programs. This will not only increase air quality but also increase economic growth. GDP is found to be dependent on energy use; however, increased energy use from non-renewable also contaminates the environment. Therefore, South Asian countries need to invest more in research and development projects to promote renewable energy.
(© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)