Unleashing the effect of energy efficiency, knowledge spillover, and globalization on environmental sustainability: an VECM analysis for policy empirics.

In current era of globalization, environmental sustainability has become a major concern in developing countries. This issue of sustainability also gained importance in Pakistan. Previous literature ignored the link of knowledge spillover along with energy efficiency and globalization on environmental sustainability in Pakistan. So, the motivation of current study is to explore the impact of energy efficiency, knowledge spillover, and globalization on environmental sustainability in Pakistan from 1980 to 2021. This study applied Phillip Perron (PP)unit test to determine the stationarity properties of study variables, and it was found that all variables are I(1). The study then applied the Johansen cointegration estimation technique, confirming a cointegration and long-run relationship between environmental sustainability, energy efficiency, knowledge spill over, and globalization. So, the vector error correction model is applied to determine the variables' long-run relationship. Results confirmed that knowledge spill over and energy efficiency negatively impact environmental sustainability by increasing the ecological footprint, while globalization positively affects environmental sustainability. Thus, for environmental sustainability policy formation, fostering circular economy practices that improve resource efficiency is essential, advocating a shift in the conventional production and utilization paradigm by recycling the natural environment and producing as little waste as possible. Further, governments should develop and stimulate the expansion of financial institutions and markets along with promoting a planned urbanization process are essential for ensuring that resources are handled sustainably. [ABSTRACT FROM AUTHOR]