STATISTICAL ANALYSIS OF CLIMATE CHANGE EFFECTS ON ENVIRONMENTAL SUSTAINABILITY: EXAMINING RENEWABLE ENERGY, NATURAL RESOURCES, AND ECONOMIC GROWTH

Abstract

Climate change and environmental degradation have become major challenges for sustainable development, particularly in developing economies such as Pakistan. This study examines the impact of renewable energy consumption, natural resource rents, and economic growth on environmental sustainability in Pakistan using annual time-series data from 1990 to 2024. Environmental sustainability is measured by the ecological footprint, while trade openness and urbanization are included as control variables. The study employs the Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test, Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) techniques to investigate the long-run relationship among the variables. The ADF results indicate that all variables are integrated of order one, I(1), while the Johansen cointegration test confirms the existence of a long-run equilibrium relationship among the variables. The FMOLS findings reveal that renewable energy consumption has a negative and statistically significant effect on ecological footprint, suggesting that increased renewable energy usage improves environmental sustainability. In contrast, natural resource rents, economic growth, and trade openness exert positive and significant effects on ecological footprint, indicating that resource exploitation, economic expansion, and trade activities contribute to environmental degradation. Urbanization shows a positive but statistically insignificant impact. The robustness of these findings is confirmed through DOLS and CCR estimations. The study concludes that expanding renewable energy adoption can play a vital role in reducing environmental pressure in Pakistan, whereas unsustainable resource extraction and conventional growth patterns continue to threaten environmental sustainability. The findings highlight the need for policies promoting renewable energy investment, sustainable resource management, and environmentally responsible economic development to achieve long-term climate and sustainability objectives.