Table 4 indicates that 1 percent rise in the consumption of energy increases the pollutants by 1.0997 per cent in long run. The result was similar to the findings of (Ozturk & Acaravci, 2010)) for Turkey. The coefficients obtained for GDP per capita linear and non-linear terms are 0.2434 and -0.0543 respectively, which confirms the presence of an EKC between per capita CO 2 emissions and economic growth in the case of Pakistan. Results provide some support in favour of EKC hypothesis that the pollution level increases at starting phases with income and stabilize, and decreases. Our study findings are broadly support the views of (Shafik, 1994) and (Selden & Song, 1995) who probed an inverted U-shape association amongst economic growth and pollution.
The issue of possible environment-growth nexus is of immense importance for the development of policies, because of the shape of EKC, which has crucial implication for policy (Arrow et al., 1995). Many researchers primarily focused on the relationship between economic growth and environmental degradation. While, some others utilized control variables in order to examine the environment-growth nexus. This study is an attempt to explore the environment- growth nexus in the presence of control variables. Our work is different from the existing literature in case of Pakistan. To the best of our knowledge, no study, till date, has examined the transmission channel of environment-growth nexus in case of Pakistan. Moreover, this study performs sensitivity analysis to select the set of robust control variables in order to test the environmentalKuznetsCurve (EKC) in the presence of control variables. Further, the study estimates the values of total carbon efficiency and per capita carbon efficiency of Pakistan. The study focuses on the tipping point of EKC in case of Pakistan. As carried out by many previous EKC studies on environmental degradation, this study also includes variables other than income as explanatory variables, because the causes of environmental degradation is considered to be complex and interlinked. In our analysis, the significances of population, energy consumption, as well as income, are investigated. The addition of these variables would facilitate to explain what kinds of policies can reduce environmental degradation. The results of this study provide better policy recommendations for economy of Pakistan to achieve better environmental quality with sustainable growth.
Antweiler et al.  examined effect of trade on environmental quality. They introduced composition, scale and technological effects by decomposing the trade model. Their study concluded that trade openness is beneficial for environment if the technological effect is greater than the composition effect and scale effect. This shows that increasing trade will improve the income level of developing nations which induce them to import less polluting techniques to enhance the production. Copeland and Taylor  supported that international trade is beneficial to environmental quality through environmental regulations and capital-labor channels. The authors documented that free trade declines CO 2 emissions.
Empirical evidence on the EKC hypothesis varies from country to country. The results tend to be mixed when CO2 emissions is the dependent variable, evidence in this paper points to an inverted U relationship for Portugal. Major contributions of this paper in testing the EKC hypothesis are threefold. Firstly, we investigate the issue based time series data for Portugal. (Jalil et al. 2010) suggest that a time series analysis for a single country may provide better framework to study the relationship. Secondly, the paper employs the ARDL method which is amenable for short time series data as in this paper. Thirdly, we provide empirical evidence of the EKC by augmenting the standard GDP variable by trade relationship, demographic factors, and energy consumption (Stern et al. 1996). Most of the existing literature have used pooled panel data of a group of countries on the emissions-growth nexus, energy-growth nexus, and emissions-urbanization nexus. These studies still provide mixed results which is the reason for keeping the problem unresolved.
It is further notable to show that Pakistan is among the low middle income group in the World Bank economic ranking and has the 6 th highest population in the world. If Pakistan needs to promote economic growth it will have to utilize its natural resources more intensively to feed its higher population already living at the low level of subsistence. It will need more energy resources to stimulate pace of economic growth. But all such growth has a positive impact on emissions of CO2, which is not a promising sign of economic development at the cost of environmental degradation and endangering lives of millions of its populations. Therefore Pakistan will have to take great care when to formulate its macroeconomic policies to promote economic growth stimulated by higher level of consumption of energy resources and avoiding polluting environment. All such macroeconomic policies are to be better formulated to feed its higher population, hence Pakistan represents a good case for understanding issues related to economic policies in context of energy and environmental economics.
Many studies have investigated the EKC hypothesis in both developed and emerging countries. For example, studies such as Khalid (2013) for Pakistan, Baek and Kim (2013) for Korea, Katircioǧlu (2014) for Singapore, Lau, Choong and Eng (2014) for Malaysia, Al-Mulali, Saboori and Ozturk (2015) for Vietnam are based on single country analysis. While other regional studies such as Li, Wang and Zhao (2016) for 28 provinces of china, Gao and Zhang (2014) for 14 Sub Saharan African countries, Nasreen and Anwar (2015) for 57 high, middle and low income countries, Omri, Daly, Rault, and Chaibi (2015) for 12 MENA countries, Jebli et al., (2017) for 25 OECD countries.
In this context, Squalli (2007) using the the Toda-Yamamoto procedure, the results show the presence of the growth and the feedback hypothesis for Indonesia and Iran, respectively. Nevertheless, Soytas and Sari (2007) found the existence of the growth hypothesis for Turkey by applying Vector Error Correction Model. Belloumi (2009) investigated the linkage between energy consumption and economic growth for the case of Tunisia covering the period from 1971 to 2004, using the Granger causality tests and VECM, which he has been found the evidence of bidirectional relationship between energy consumption and economic growth supported the feedback hypothesis in the long run and he has been also found the presence of unidirectional relationship which he supports the growth hypothesis. Furthermore, Halicioglu (2009) investigated the relationship between energy consumption and economic growth, during the period of 1960-2005, for Turkey by applying the Granger causality tests, ARDL and cointegration. The results showed that there is no evidence relationship between the variables that consistent with the neutrality hypothesis. In addition, Zhang and Cheng (2009) have been examined this relationship for China over the period from 1960 to 2007 by applying the Granger causality tests, which the findings show that economic growth Granger causes energy consumption and consistent with the conservation hypothesis. Nevertheless, Soytas and Sari (2009) investigated this linkage by applying the Toda-Yamamoto procedure For Turkey over the period 1960-2000. The results show that there is no evidence of causal relationship proving the neutrality hypothesis. Moreover, Jamil and Ahmad (2010) have been studied the linkage between economic growth and energy consumption for Pakistan using the VECM during the period from 1960 to 2008 and they found a unidirectional causal relationship running from economic growth to energy consumption supporting the conservation hypothesis. Also, Lotfalipour et al. (2010) have studied this linkage for Iran which they employed Toda-Yamamoto procedure for the study period 1967-2007, the results show the presence of conservation hypothesis. Besides, Ahamad and Islam (2011) investigated this relationship using the Vector Error Correction Model in the case of Bangladesh over the period 1971-2008 which they found a bidirectional relationship in line with the feedback hypothesis. Also, Kaplan et al. (2011), where they applied Johansen -Juselius and Granger causality, covering the period of 1971-2006 for Turkey. They confirmed the feedback hypothesis.
Evidencefrom the 1960-2000 base specification of the Kuznetscurve gives the idea of a significant inverted U-shape relationship between the intensity of CO2 emissions and per capita GDP (Table 5). Parameters significance is quite strong and with the expected sign. An important aspect of our findings is that the predicted maximum point of the estimated EKC is not always below the mean value of per capita GDP in the sample. This is not consistent with Selden and Song (1994) arguing that the upward-side of the curve is very small and the majority of the countries are in the downward side of EKC. If the base specification is extended, the GDP effect is still robust when conditioned to supply and demand side effects. Since the Kuznetscurve is both a cross-sectional and a time-series phenomenon it is interesting to see that the within (time-series) effect prevails when we abandon this simple specification and condition for supply and socio-economic factors. Goodness of fit is largely improved by the inclusion of additional regressors, even though the number of observations is much smaller. The within (overall) R-squared goes from .02 (.01) in the unadjusted EKC to .63 (.16) in the adjusted EKC specification (Table 5). To avoid the risk that differences of results between unadjusted and adjusted EKC specifications are
Empirical tests and theoretical debates on EKC have been ongoing since it was discussed in 1992 in the World Development Report 1992: Development and the Environment by the World Bank. Until the mid 1990s, most of the empirical studies concentrated on validating the EKC hypothesis and its requirements by using cross-sectional data. Some of evidence on pollutants supported the validity of EKC, such as the work of Grossman and Krueger (1995) and Selden and Song (1994), while other studies indicated that EKC did not hold at all times and for all pollutants, such as the work of Shafik (1994). Since the late 1990s, the EKC studies have shifted from cross-sectional analyses to time-series analyses, especially analyses for comparing EKC of individual economies in terms of such factors as the height and the timing of their peaks or their shapes as found in the works of, among others, Panayotou (1997) and De Bruyn, Van den bergh and Opschoor (1998).
In recent years, countries have put serious efforts to take measures to tackle environme nta l degradation through agreements. Since evidence shows a serious global warming problem, scholars have also intensified their interest in empirical studies related to the environment, and the main interest of these studies is the economic growth – environmental quality nexus. In this paper, the validity of the environmentalKuznetscurve hypothesis in the Turkish economy is analyzed for the period 1971 – 2010. To do so, the unit root test of Lee and Strazicich (2003 and 2013) and the cointegration analysis of Maki (2012), which is assumed to have endogenous structural breaks in time series, are used. By using the ECM and the DOLS estimat io n techniques, the short-run and the long-run coefficients are also obtained. In addition, the effects of energy consumption and export product diversification on CO 2 emissions are also controlled
There is little doubt that non-economic vari- ables such as the features of the political system or some cultural values play an important role in the implementation of environmental-friendly policies (Ng and Wang, 1993; Antle and Heide- brink, 1995; Baldwin, 1995; Hettige et al., 1996). For instance, diffused property rights, a demo- cratic voting system and respect of basic human rights, may facilitate the implementation of regu- lation that protects the environment. In fact, there is wide consensus now that an understanding of the nature of the interactions between the eco- nomic sphere and political sphere may shed light on the actual determinants of policy decisions (Alesina and Rodrik, 1994; Verdier, 1994). The purpose of the analysis that follows is to model a situation in which moments of the income distri- bution function other than its mean affect the level of pollution abatement expenditure. Let us assume an additively separable utility function for individual l:
This is an aspect, which is largely missing in the recent empirical literature on the EKC estimation. There are possibilities that the emissions beyond a certain level might not be reversible, and that is the point, from where environmental degradation will only rise monotonically. This is one major aspect, which is largely missed out in empirical analysis carried out during estimation of EKC in any context. If the studies done for a particular country or a group of countries can be seen together, then it becomes visible that the EKCs estimated in that context is not stable, as a change in the time frame can change the shape of EKC, and sometimes even its existence (see Table-1). Saying this, it might be wrong to suggest policy implications based on mere empirical results, which just reveal the turnaround level of economic growth, because the policy recommendations should also take into account the height of the EKCs. Therefore, it will make the policymakers not to wait for the turnaround point to occur, but it will make them to intervene for flattening the EKC.
Lopez and Miltra’s (2000) theoretical postulation that, for any level of per capita income, the rent-seeking activities of government officials raises pollution levels above the social optimum is particularly relevant for a resource dependent economy like Nigeria with very high levels of institutional corruption. Also, according to the Hecksher-Ohlin theorem, several authors have emphasized the role of international trade in shaping the income-environment relation. There is theoretically no consensus on the expected direction and nature of the impact of trade on the environment. Rothman (1998) explains that what may appear to be an improvement in environmental quality as a result of trade may in reality be an indication of the increased ability of consumers to distance themselves from the environmental degradation associated with their consumption; an idea referred to as the pollution heaven hypothesis. Copeland and Taylor (2004) conducted an extensive survey on this issue, and though he acknowledges the links between trade, environment and regulation, he downplays the idea of the pollution heaven hypothesis on grounds of little empirical support.
Therefore, promoting sustainable development in MENA countries requires careful analysis of the sources of environmental degradation. Therefore, the purpose of this study is to provide both theoretical and empirical insights into the nature of the relationships that can exist between economic growth, fossil fuel consumption and TG emissions. This leads us to verify the hypothesis of the KuznetsEnvironmentalCurve (KEC) for the selected countries. The reason that motivated us to tackle such a problem is the lack of consensus between the results of the work in this area, as some works have confirmed the hypothesis of the KEC, while others deny it. As such, this contribution is based on a new and appropriate methodology. This is an empirical panel data analysis of 10 MENA countries during the period from 1980 to 2017. In addition, the Translog functional form (Transcendental-Logarithmic) will be used to estimate the relationship between dependent variable (TG emissions) and explanatory variables (GDP per capita, energy consumption). The use of the econometric specifications of the Translog function in panel data is justified for various reasons. This function is flexible; it captures at the same time not only the effect of each explanatory variable on the endogenous variable, but also the nature of the relation between the explanatory variables, as well as the estimation and their quadratic effects. Therefore, the sign of the quadratic term of GDP per capita will be of paramount importance to invalidate or confirm the hypothesis of the KEC.
Criticism of the accuracy of the inequality time series constructed by Deininger and Squire cast a shadow over research using the data set. The measured level of inequality depends sensitively on the definition of income or expenditure, unit of observation, survey coverage, etc. Combining inequality estimates to construct a time seriesfrom studies using different definitions and methods risks introducing spurious jumps due to changes of definition. Atkinson and Brandolini (2003) were skeptical of the accuracy of time series constructed by Deininger and Squire. They showed that for many Western European countries, Deininger and Squire's time series often departed significantly from a series Atkinson and Brandolini constructed using consistent definitions, causing the series to have serious inaccuracies both in the level of inequality and the trend over time. Western European data should presumably be among the most accurate. Atkinson and Brandolini conclude that “we are not convinced that at present it is possible to use secondary datasets [like Deininger and Squire] safely” without evaluating the accuracy of each series within it. Atkinson and Brandolini’s critique effectively ended use of
The short run dynamics are reported in Table-5 and results indicate that linear and non-linear terms of real GDP per capita have positive and negative impact on energy emissions indicating the validation of environmentalKuznetscurve (EKC). Energy consumption has positive and strong effect to increase energy pollutants. By consequence, if the communist regime tolerated the energy emissions in order to obtain a high output level, but with expensive costs, the actual democratic authority must stimulate energy efficiency, with a low amount of energy emissions. In this way, the Romanian actions follow the EU general energy policy.
Graphical representation of the Laffer curve for the euro zone by Bunescu and Comaniciu (2013) showed that tax system take changes by itself over a long period of course. The best possible point from where taxation should be started is to look at a Laffer curve that is what should be maximum possible tax rate for the economy although taxation varies along the member countries. While Holteret et al. (2014) recommend that progressive tax system will create low income because the individual households vary along by studying the American and European society Laffer curve of seven percent would be better to enhance the income. The concept of no debt can also be overcome with formulated approach with the help of Laffer curve that debt can be recover through a tax culture. The tax revenue can be used as a key to expenditures for the public and then tax again by opting an ideal rate of the tax. In times of depressions Laffer curve can serve as income generator for the economy study such as Isakov and Pekarski (2015) favored the idea that although it cannot be good for the labors and spending for shows positive results for tax and revenue increases. In depression the economic activity is down and the debt has huge cost of interest rate in that case Laffer curve tactically paves the way for upward movement.
A sizeable number of empirical studies on the EKC hypothesis exist (e.g. Akbostanci, Turut- Asik & Tunc, 2009; Diao, Zeng, Tam & Tam, 2009, Re & Richard,2010) 5 . However, in contrast to the vast empirical literature on the EKC, there are only a few studies that have focused on developing countries. Specific country studies, as against cross country studies, also tend to be few. Based on an alternative growth model, De Bruyn et al. (1998) estimated the individual EKC for four countries, namely, the Netherlands, UK, USA and Western Germany, using data from 1960 to 1993. Their analysis reveal that the EKC is not generally fit for all the countries: each country has its own technological, structural, energy price and economic growth path, so the emission situation should not be the same. Hence, it has been argued that only single country studies can really provide an answer to the existence of EKC.
The EKC hypothesis has been tested in the case of the PRC by several authors. Groot et al.  estimated EKCs for emissions or discharges of waste gas, waste water, and industrial solid wastes using provincial panel data from 1982 to 1997. They found that the emission-income relation depends on the type of pollutants and on how the dependent variable is constructed. The waste gas emission in terms of levels is found to follow an inverted-U pattern, but waste gas emissions in per capita or per unit of output terms, as well as waste water discharge, do not. Liu et al.  examined time series concentration data of various water pol- lutants in Shenzhen. They find that production-induced pollutants, as opposed to consumption-induced pollutants, support the EKC hypothesis. Shen  esti- mateda simultaneous three-equation model to address the endogeneity problem associated with per capita GDP and per capita pollution abatement expenses. Shen finds the EKC relationship for water pollutants but not for air pollutants. Auffhammer and Carson  find the EKC relationship between (log) per capita waste gas emissions and (log) total GDP in a two-way fixed effects model speci- fication. Jiang et al.  show that there exists an inverted-U shaped relationship between per capita income and per capita emissions (or discharges) of wastegas from fuel burning and waste water, with a turning point at per capita gross do- mestic product of $12,903 and $3,226, respectively, in 2005 purchasing power- parity terms.
Second, EKC has drawn attention from scholars for several years (e.g. (Ma & D. I. Stern 2006). Studying EKCs for deforestation may therefore offer an interesting case in the methodology of economics from a sociological point of view. According to (Kuhn 1996), scientists share common beliefs and practices which circumscribe the “normal science”. They are often reluctant to diverge from them since they are most of the time evaluated and published according to rules widely accepted within the normal science. EKCs seem to belong to such a set of practices. It is indeed rather striking that several researchers seem to consider it as “econometrics as usual” i.e. a relevant hypothesis which helps understanding environmental degradation and for instance the deforestation process. Other researchers have conducted critical reviews and forcefully argued in favour of its obsolescence (Levinson 2002; D. I. Stern 2004). Thus there seems to be a discrepancy between, on the one side, researchers who dismiss EKCs and, on the other side, scientists who consider that EKCs are relevant. Among the latter, the EKC is still presented as one of the hypotheses explaining the forest transition process (Barbier et al. 2010; Rudel et al. 2005; Mather 1992).