Testing the income-finance-trade-environment nexus based on the ecological load capacity factor: Frequency-domain causality evidence from Nigeria

Evaluating forest depletion and structural change effects on environmental sustainability in Pakistan: Through the lens of the load capacity factor

The pace of species extinction and deforestation has increased dramatically due to the substantial increase in global environmental degradation. This trend is approaching the crucial temperature threshold of 2 °C and calls for more attention. Although previous research has observed the individual impacts of forest depletion, structural change, economic growth, and urbanization on various sustainability outcomes, there has been no previous research into their interrelationships with an emphasis on the load capacity factor (LCF). Furthermore, no previous study has examined the environmental impacts of the abovementioned variables by contrasting the results of LCF and CO2 emissions in Pakistan. Therefore, this research suggests a theoretical framework that integrates these concepts, provides a roadmap for an effective and sustainable mitigation strategy for Pakistan and compares LCF results with CO2 emissions. Using the time-series data from 1970 to 2021, a unique and sophisticated dynamic Autoregressive Distributed Lag (DARDL) technique, the authors found that (i) a 1 % rise in forest depletion leads to a decline in load capacity factor by 0.026 %. (ii) A one per cent upsurge in structural change fosters environmental sustainability by raising the load capacity factor by 0.084 %. (iii) An increase of 1 % in economic growth dwindles the load capacity factor by 0.027 %. (iv) A one per cent surge in urbanization enhances the load capacity factor by 0.029 %. The findings suggest that Pakistan's Government should promote afforestation by emphasizing the constructive role of structural change in achieving environmental sustainability.