Sectorial study of technological progress and CO2 emission: Insights from a developing economy

Many studies have stated that technological progress is an important driver of carbon dioxide (CO2) emissions and energy consumption. However, the sectorial differences in the relationship between CO2 emission and technological progress have been understudied by scholars. This study attempts to fill such gap by empirically investigating the impact of technological progress on CO2 emissions. A quantile regression method and balanced national data from Pakistan covering the period of 1991-2017 are used to establish relationships among the variables. The results and analysis reveal that the agriculture and services sectors have a negative impact on CO2 emissions, whereas the construction, manufacturing, and transportation sectors greatly contribute to these emissions. The lower, medium, and upper-level emitters are used to understand the percentile conditions of each variable. A scenario analysis is also performed to forecast the reduction proportion of CO2 emissions for the best understanding and policy implication in 2030, 2035, and 2040. The results of this study provide useful insights into the relationship between technological progress and CO2 emissions and suggest different scenarios for reducing CO2 emissions in the future that can support policy makers and planners.