On the influence of demographic structure and industrial growth on environmental quality

Abstract

The working-age population is an essential driver of economic growth that facilitates industrial growth, trade, and urbanization, but its impression on environmental quality is under-researched. This study proposes a novel framework to estimate the impact of demographic structure, industrial growth, and urbanization on two indicators of the environment (CO₂ & Ecological footprints) in seven South Asian countries (SAARC) over 1985-2016 employing "Stochastic Impact by Regression on Population, Affluence, and Technology (STIRPAT)" framework. The results showed the variables have "cross-sectional dependence" and panel heterogeneity. Similarly, the Pedroni, Kao & Westerlund tests indicated the cointegration relationship between the models' chosen variables. The long-run empirical estimates imply that the linear term of industrial growth is negative. The quadratic term is positive, thus supporting the U-shaped Kuznets phenomenon in the SAARC countries. Similarly, the working-age population (demographic structure), urbanization, and trade are detrimental environmental quality indicators. The causal linkages developed between the variables duly verified the causality between demographic structure, urbanization, and industrial growth with environmental degradation based on ecological footprints and CO₂ emissions. These results for SAARC countries offer important policies for theorists, academicians, and practitioners.

Keywords: CO(2) emissions; Demographic structure; Ecological footprints; Industrial growth; SAARC countries.