Asymmetric variations in economic globalization, CO₂ emissions, oil prices, and economic growth: a nonlinear analysis for policy empirics

Pakistan's economic development and budgetary resilience are greatly influenced by globalization, CO₂ emissions, and oil prices, necessitating a deep understanding of these factors. This study aims to investigate how factors like carbon dioxide emissions (CO₂), oil prices, and economic globalization have affected economic growth in Pakistan from 1980 to 2021. This study uses the nonlinear autoregressive distributional lag approach to examine how asymmetric effects of economic globalization, oil prices, and carbon dioxide emissions (CO₂) have affected Pakistan's economic growth. Further, the direction of these relationships is determined using Granger causality tests, and the model stability is evaluated by CUSUM and CUSUMQ tests. The results show that GDP is impacted inequitably by economic globalization, oil costs, and CO₂ emissions. Oil price increases have a considerable beneficial effect on GDP, whereas growing CO₂ emissions have the opposite effect. GDP and economic globalization are strongly correlated, and as globalization declines, economic production suffers. Based on the results, it is recommended that Pakistan's government should develop strategies to adapt to globalization's changing conditions, including renewable energy, deforestation control, and population planning for long-term climate change solutions.