Impact of transportation infrastructure and urbanization on environmental pollution: evidence from novel wavelet quantile correlation approach

In terms of achieving sustainable development goals (SDGs), the developing economies are facing many issues, and one of the key issues is environmental degradation. Being a developing economy, Pakistan is also experiencing thought-provoking impacts of global warming and still far away from the ideal track of sustainable development. For addressing environment-related issue and achieving the targets of SDGs, a policy-level reorientation might be necessary. In this view, this study investigates the impact of economic growth, transport infrastructure, urbanization, financial development, and renewable energy consumption on CO₂ emissions by using the data of Pakistan during 1990-2020. For this purpose, we use novel wavelet quantile correlation approach. The empirical results of wavelet quantile correlation approach demonstrate that economic growth, transport infrastructure, urbanization, and financial development are responsible for environmental pollution. Whereas, result also claims that renewable energy consumption is a useful tool for reducing environmental pollution in Pakistan. Moreover, the results of FMOLS approach show that 1% increase in economic growth, transportation infrastructure, urbanization, and financial development increases CO₂ emissions by 0.240, 0.010, 0.478, and 0.102%, respectively. However, 1% increase in renewable energy usage reduces CO₂ emission by 1.083%. Based on the empirical outcomes, this study proposes comprehensive policy framework for achieving the targets of SDG 7 (clean energy), SDG 8 (economic growth), SDG 11 (sustainable cities and communities), and SDG 13 (climate action).