<p>The global economy relies heavily on energy use, and the interaction between energy consumption and environmental quality is complex. Pakistan is confronting the challenge of rising carbon emissions, driven by escalating energy demands across various sectors, including industrial, agricultural, and transport. This situation necessitates the formulation of effective policies aimed at mitigating environmental degradation while promoting economic growth. The primary objective of this study is to establish the interactions between energy consumption in the agricultural, industrial, and transportation sectors and environmental quality in Pakistan. Utilizing data spanning from 1972 to 2022, this study implements Autoregressive Distributed Lag (ARDL) and Dynamic Autoregressive Distributed Lag (DARDL) models to examine the short-run and long-run dynamics between energy consumption across various sectors and carbon dioxide emissions. The research also applied the frequency domain Granger causality test to assess causal dynamics. The results indicate significant short-run effects of energy consumption in the agricultural, industrial, and transportation sectors on CO₂ emissions. Furthermore, long-run environmental quality is significantly influenced by both population growth and foreign direct investment. Impulse response functions determine the impact of energy usage shocks and other factors on the environment. This study concludes that sectoral energy consumption significantly influences CO₂ emissions in Pakistan, offering novel insights for policymakers and researchers. To mitigate environmental degradation, it is imperative for policymakers to implement sector-specific emission reduction strategies in high-energy-consuming industries. Additionally, it offers broader implications for developing economies with comparable energy compositions and environmental challenges, highlighting the need for cross-sectoral management of energy and sustainability.</p>