Unveiling the asymmetric impact of energy consumption on environmental mitigation in the manufacturing sector of Pakistan.

The manufacturing sector is the backbone for the development of an economy. Numerous studies investigated the impact of aggregative energy consumption on environmental degradation by using typical econometric techniques. To correct this gap, our study uses energy consumption and environmental degradation only in the manufacturing sector of Pakistan for the period 1985 to 2018. Our study also demonstrates the symmetric and asymmetric behaviour of energy consumption with carbon emissions by using a recently developed methodology by Shin et al. (2014). The findings of linear autoregressive distributive lag model shows that energy consumption and financial development intensify environmental degradation, while foreign direct investment and globalization mitigate environmental degradation that leads to validate pollution halo hypotheses in Pakistan. However, non-linear autoregressive distributive lag results confirm the asymmetric behaviour of energy consumption with co emission. This study recommends the policies for policymakers in Pakistan to consider asymmetric behaviour of energy consumption as well as the installation of renewable energy sources and technological improvements in the industrial sector needed to enhance environmental sustainability. Further, there is a need to enhance globalization and foreign direct investment for Pakistan to achieve its environmental targets.