Impacts of industrialization, trade openness, renewable energy consumption, and urbanization on the environment in South Asia

The impacts of pollution are not limited to humans only but also affect the entire harmonious setting of the planet. This is evident from prior studies that industrialization and energy use pollute the environment of numerous regions. As South Asia is most influenced by the relase of hazardous gasses, as in this region temperature is high and industrialization severely pollute the environment. With increased globalization, accelerated industrialization, and rapid and greater-than-ever international transfer of products and services, the average temperature of the planet is rising. This study investigates the effect of industrialization (IND) and trade openness (TO) on environmental pollution (EP) while taking the roles of capital (K), renewable energy consumption (REN), and urbanization (URB) in South Asia from 1990 to 2018. Our dataset has the issue of cross-sectional dependence (CSD). Subsequently, to account for the problem of CSD, we have applied the Fixed Effects (FE), Random Effects (RE), Augmented Mean Group (AMG), and Common Correlated Effects Mean Group (CCEMG) approaches. Stationarity tests confirmed that EP, IND, TO, REN, K and URB are stationary at I(1), leading towards the Westerlund co-integration test, which affirms a long-term linkages among the concerning variables. The empirics of FMOLS, DOLS, CCEMG and AMG demonstrate that IND, TO, and URB are the INCREASING factors of environmental pollution while renewable energy consumption improves the environmental quality. Furthermore, in the case of FMOLS and CCEMG, capitalization has positive influences on pollution. Findings of Dumitrescu Hurlin (D-H) causality show the one-way causality from industrialization, trade, and other factors to the level of pollution. The study suggests some policy implications to promote sustainable economic growth by encouraging green technologies and environmental regulations to minimize the pollution.