Energy Consumption, Power Transmission Losses, and Natural Resource Depletion: Implications for Environmental degradation in South Asia

Abstract

This paper explores the long-run and short-run impacts of electric power consumption, power transmission and distribution losses, and natural resource depletion and economic growth in the environmental degradation of South Asia. Based on data on balanced panel, Pakistan, India, and Bangladesh between 1990 and 2022, carbon dioxide emissions per capita is used as a proxy of environmental degradation. The panel unit roots tests are also used to show that there are mixed orders of integration between the variables, which supports the use of a panel autoregressive distributed lag (ARDL) test. Kao cointegration test proves the existence of a long-run relationship of equilibrium. According to the long-run approximations of the pooled mean group estimator (PMG) estimator, it is clear that electric power consumption, transmission and distribution losses, depletion of natural resources and economic growth are major contributors to environmental degradation. Short-run outcomes also show that any disequilibrium in the long-run can be corrected slowly, and in the meantime, energy wastage and resource depleting activities have an immediate cost to the environment. The results indicate that efficiency of the power sector and sustainable management of resources are of extreme significance in reducing environmental degradation. The policy implications focus on the necessity of investing in the energy infrastructure, lowering electricity wastage, and using cleaner energy sources that will facilitate the growth of South Asia in an environmentally friendly manner.