This chapter include previous research review for this study which had different conclusions

between environmental degradation with selected factors in SAARC region. The different
research works was acknowledged different factors and their association with the
environmental degradation. Some of these studies was showed negative association between
variables, while some of them were observed positive association, very few of them were
examined that there has no association exists amongst the variables with environmental
degradation.

Al-Mulali et al (2015) was examined the impact of urbanization, economic growth, energy
consumption and openness of trade on CO2 emission in Nigeria for the period of 1971-2011
by applying ARDL. The replicates of the analysis revealed that economic growth and energy
consumption has positive impact; the trade openness having negative while the urbanization
has no impact on CO emission in Nigeria. The suggestions were totally beard in favor of the
govt policies for the easy access of trade with Nigerian economy with rest of the world.

Al-Mulali & Ozturk (2015) were evaluate the causes of environmental degradation in 14
countries of MENA region with utilizing ecological footprint. They observed with Pedroni
test that ecological footprint, urbanization, economic growth, energy consumption, openness
of trade, industrial development and political stability are cointegrated while the FMOLS
gives results that urbanization, energy consumption, openness of trade, industrial
development positive association and political stability has negative association with
environmental degradation in long run.

Al-Mulali et al (2015) was investigate the influence of disrupted renewable energy

production by source CO2 emission in 23 countries of Europe for the period from 1990 to
2013. Panel data techniques were used in examining the relationships. The results of Perdoni
test explores that CO2 emission, growth of GDP, urbanization, financial development and
renewable electricity by source were cointegrated. But FMOLS results described that growth
of GDP, urbanization, and financial development having positive while trade openness
having negative impact on CO2 emission in long run.

Shahzad et al (2017) examined the association of CO2 emission, energy consumption, trade
openness and financial development in Pakistan in 19971 – 2011 with using ARDL. The
results show the inverted U- shaped association between energy consumption and CO2
emission. The trade openness and financial development has positive association in long run
and short run. It was suggested tha govt of Pakistan should focus on climate change effects.

Dogan & Turkekul (2016) was investigate the relationship between carbon dioxide (CO2)
emissions, energy consumption, real output (GDP), the square of real output (GDP 2), trade
openness, urbanization, and financial development in the USA for the period 1960–2010. The
results revealed that energy consumption and urbanization having positive association with
environmental degradation; financial development having no impact while trade having
negative association with environmental degradation. The results from the Granger causality
test show that there is bidirectional causality between CO 2 and GDP, CO2 and energy
consumption, CO2 and urbanization, GDP and urbanization, and GDP and trade openness
while no causality is determined between CO2 and trade openness, and gas emissions and
financial development. In light of the long-run estimates and the Granger causality analysis,
the US government should take into account the importance of trade openness, urbanization,
and financial development in controlling for the levels of GDP and pollution.

Ozatac et al (2017) was investigates the environmental Kuznets curve (EKC) hypothesis for
the case of Turkey from 1960 to 2013 by considering energy consumption, trade,
urbanization, and financial development variables. The results of the bounds test and the
error correction model under autoregressive distributed lag mechanism suggest long-run
relationships among the variables as well as proof of the EKC and the scale effect in Turkey.
A conditional Granger causality test reveals that there are causal relationships among the
variables.

Al-Mulali et al (2015) were examined the existence of the environmental Kuznets curve
(EKC) hypothesis in Vietnam during the period 1981–2011 by applying the ARDL. The
results revealed that the pollution is positively associated with capital, fossil fuel energy
consumption and imports; however, exports, renewable energy consumption has no effect;
the labor force reduces pollution since most of Vietnam's labor force is in the agricultural
and services sectors which are less energy intensive than the industrial sector. Based on the
obtained results, the EKC hypothesis does not exist because the relationship between GDP
and pollution is positive in both the short and long run.

Alam et al (2011) was examined the association between trade liberalization, sustainable
economic development and environmental degradation with some other variables like human
development, fertilizer consumption, human development, urbanization and industrialization
in Pakistan. They explored that trade liberalization, human development, fertilizer
consumption, human development, urbanization and industrialization on environmental
degradation in Pakistan. Industrial, agricultural activities and urbanization negative effect on
environment, while trade liberalization and human development having positive effect in
Pakistan.

Hossain (2011) examined the dynamic causal relationships between carbon dioxide
emissions, energy consumption, economic growth, trade openness and urbanization for the
panel of newly industrialized countries (NIC) using the time series data for the period 1971–
2007. The Granger causality test results support that there is no evidence of long-run causal
relationship, it is found that the long-run elasticity of carbon dioxide emissions with respect
to energy consumption is higher than short run elasticity which indicates that over time
higher energy consumption in the newly industrialized countries gives rise to more carbon
dioxide emissions as a result the environment will be polluted more.

Zaman & Abd-el Moemen (2017) examined the interrelationship between energy
consumption, economic growth and carbon dioxide (CO2) emissions under the six alternative
and plausible hypothesis including Environmental Kuznets Curve (EKC), Pollution Haven
Hypothesis (PHH), population based emissions (IPAT), energy led emissions, sectoral
growth emissions and Emissions emancipated Human Development Index (EHDI) in the
context of low and middle income countries, high income countries and in aggregated panel,
over the period of 1975–2015. The results supported the EKC hypothesis, IPAT hypothesis,
energy induced emissions, and sectoral growth emissions in different regions of the world,
while PHH and eHDI hypothesis does not confirm across regions. They exclusively
determine the key socio-economic and environmental problems from the study in a large pool
of the world economies to understand the need of development policy agenda for sustainable
growth.

Hanif (2018) explored the impact of economic growth; urban expansion; and consumption of
fossil fuels, solid fuels, and renewable energy on environmental degradation in developing
economies of Sub-Saharan Africa. To demonstrate its findings in detail, the study adopts a
system generalized method of moment (GMM) on a panel of 34 emerging economies for the
period from 1995 to 2015. The results describe that the consumption of fossil and solid fuels
for cooking and expansion of urban areas are significantly contributing to carbon dioxide
emissions, on one end, and stimulating air pollution, on the other. The results also exhibit an
inverted U-shape relationship between per capita economic growth and carbon emissions.
This relation confirms the existence of an environmental Kuznets curve (EKC) in middle-
and low-income economies of Sub-Saharan Africa.

Al-Mulali & Ozturk (2016) examined the effect of energy prices on pollution and investigate
the existence of environmental Kuznets curve (EKC) hypothesis in 27 advanced economies.
taking the period of 1990–2012. The panel Kao and Fisher cointegration results showed that
CO2 emission (CO2), gross domestic product (GDP), renewable energy consumption (RE),
non-renewable energy consumption (NR), trade openness (TD), urbanization (UR), and
energy prices (PC) are cointegrated. Moreover, the panel fully modified ordinary least square
and the vector error correction Granger causality results revealed that GDP, NR, and UR
increase CO2 emission while RE, TD, and PC reduce it. Furthermore, the inverted U-shaped
relationship between GDP and CO2 emission was confirmed which signifies the presence of
the EKC hypothesis.

Zhang et al (2017) examined whether the hypothetical environmental Kuznets curve (EKC)
exists or not and investigates how trade openness affects CO 2 emissions, together with real
GDP and total primary energy consumption. They take ten newly industrialized countries
(NICs-10) from 1971 to 2013. Their results support the existence of hypothetical EKC and
indicate that trade openness negatively affects emissions, while real GDP and energy do
positive effects. The error correction terms (ECTs) reveal in the long run, feedback linkages
of emissions, real GDP, and trade openness, while energy Granger causes emissions, real
GDP, and trade, respectively.

Senan (2018) was investigate the EC and financial market development (FMD) nexus
incorporating economic growth and urbanization in analyses by using a period 1970-2015 for
Saudi Arabia. He found positive effects of economic growth, urbanization and FMD on the
EC in long and short run analyses. Based on results, they recommend the Saudi economy to
increase the electricity production capacity through several energy resources especially
renewable and clean sources to meet the demand from rising economic growth, urbanization
and FMD.
Wang et al (2017) were utilies extended STIRPAT model based on the classical IPAT
identity was used to determine the main driving factors for energy related carbon emissions in
Xinjiang. In order to get the best understanding of driving factors on carbon emissions during
1952–2012. Research results show that the impacts and influences of various factors on
carbon emissions are different in the three different development stages. Before the Reform
and Opening up (1952–1977), carbon intensity and population size are the two dominant
contributors to the carbon emissions increments. After the Reform and Opening up (1978–
2000), economic growth and population size are the two dominant contributors to the carbon
emissions increments. During the Western Development (2001–2012), fixed assets
investment and economic growth are the two dominant contributors to the carbon emissions
increments

Al-Mulali et al (2016) was investigates the environmental Kuznets curve (EKC) hypothesis
in Kenya using the time period of 1980–2012 with the application of ARDL approach. The
outcome revealed that fossil fuel energy consumption, GDP, urbanization, and trade openness
increase air pollution mutually in the long run and short run. However, renewable energy
consumption and financial development reduces air pollution. Based on the results, the EKC
hypothesis does exist in Kenya.

Alam (2010) was investigate the impact of globalization, and poverty along with other socio-
economic and demographic factors (such as industrialization, fertilizer use, urbanization,
population growth and education) on environmental degradation in Pakistan. They found a
long run relationship between economic growth, environmental degradation, globalization,
poverty and other socio-economic and demographic factors mentioned above.

Ahmed et al(2015) explored the validation of the Environmental Kuznets Curve (EKC)
hypothesis for Pakistan using time series data from 1980–2013 with deforestation as an
indicator (dependent variable) for environmental degradation, and four independent variables
(economic growth, energy consumption, trade openness, and population) were also examined.
ARDL bounds testing approach and VECM–Granger causality test were applied. Their
results confirmed the existence of cointegration among the variables both in long- and short-
run paths. However, the diminishing negative impact of economic growth on deforestation in
the long run confirms the EKC hypothesis for deforestation in Pakistan. Moreover, economic
growth and energy consumption Granger cause deforestation. A bidirectional causal effect is
detected between economic growth and energy consumption, however, in the long-run,
economic growth and trade openness Granger cause energy consumption.

Al-Mulali et al (2015) were evaluate the environmental Kuznets curve (EKC) hypothesis
using a country’s ecological footprint as an indicator of environmental degradation. Ninety-
three countries were examined, categorized by income. The GMM results clearly showed an
inverted U-shaped relationship between the ecological footprint and GDP growth, which
represents the EKC hypothesis in upper middle- and high-income countries but not in low-
and lower middle-income countries. Energy consumption, urbanization, and trade openness
increase environmental damage through their positive effect on the ecological footprint of
most countries across all income groups. However, financial development reduces
environmental degradation in lower middle-, upper middle- and high-income countries.

Amri (2018) examined the linkage between CO2 emissions, total factor productivity as a
measure of income, information and communication technology (ICT), trade, financial
development, and energy consumption in Tunisia from 1975 to 2014 by application of
ARDL. The results show an insignificant impact of ICT on CO2 emissions as a measure of
pollution. In addition, trade, financial development, and energy consumption affect
negatively the environmental quality.

Aboagye (2019) Relied on recent annual dataset from the World Bank for the period 1980-
2016 they seek to examine the environmental impact of energy consumption in Ghana within
the standard Environmental Kuznets Curve (EKC) framework. Using ARDL model
estimation, the study revealed among other findings that energy consumption tends to
increase air, water and land pollutions measured respectively by CO2 emissions, BOD and
deforestation. Their outcome was major point of concern as the evidence does not support the
view that Ghana can grow out of pollution problems with wealth within the context of energy
consumption.

Mahrinasari et al (2019) was examine association between environmental degradation and

trade openness in a panel of selected ASEAN countries i.e. Malaysia, Indonesia, Singapore,
Thailand and Philippine by utilizing advanced methods of panel Dynamic Ordinary Least
Square (DOLS) and Fully Modified Ordinary Least Square (FMOLS). The results of
bootstrap cointegration, Pedroni, and Kao cointegration check that all the variables are
cointegrated in the long term. They recommend that the government need to enhance trade
based on renewable and green technology.

Sinha et al (2017) were examined the environmental Kuznets curve (EKC) for CO2
emissions in N-11 countries during 1990-2014 by segregating three forms of energy
consumption (renewable, biomass and non-renewable). Using the Generalized Moments
Method (GMM), the empirical evidence confirms the presence of an N-shaped relationship
between economic growth and environmental degradation for N-11 countries. they analyzed
the interaction effects among trade openness, biomass consumption and economic growth;
these interactions had a negative impact on CO2 emissions levels of N-11 countries. Suitable
policy recommendations have been provided based on the detailed results.

Adams et al (2017) were examine the relationship between urbanization and environment
degradation while controlling for political environment in 38 African countries over the
period 1970–2011. Using panel cointegration and causality analyses, they find that
urbanization, environmental degradation (CO2 emissions) and political economy variables
(democracy and bureaucratic quality) are cointegrated. Second, democracy and bureaucratic
quality are effective in reducing environmental degradation in the long run. Third, there are
positive bi-directional relationships between CO2 emissions and affluence and population as
shown by panel vector autoregressive and impulse response functions. However, a negative
uni-directional relationship runs from CO2 emissions to bureaucratic quality.

Zandi et al (2019) were examine the impact of trade liberalization on carbon dioxide
emission. They used the panel data of 105 developed and developing countries from 1990 to
2017. The results of FMOLS and DOLS confirm that all variables are connected in the long-
run period. The results of long run coefficient confirm that that the trade liberalization,
economic growth and energy consumption has positive impact on environmental degradation.
The results of heterogeneous panel causality confirm that there is a uni-directional causal
relationship between trade liberalization and environmental degradation.

Azam & Khan (2016) were estimate the Environmental Kuznets Curve (EKC) hypothesis for
four countries from low income, lower middle income, upper middle income and high-
income countries namely Tanzania, Guatemala, China and the USA, respectively. Annual
time series data covering the time period 1975–2014 are used for the empirical investigation.
Results of Johansen co-integration test indicate that there exists one co-integrating
relationship among the variables in the case of the USA and China, while in the case of
Tanzania and Guatemala, there exist two co-integrating linkages. Similarly, the Pearson
correlation result among the five variables shows that energy consumption has a significant
positive relationship with trade openness and CO2 emissions in Tanzania, the USA,
Guatemala and China, whereas, a significant negative relationship with economic growth in
all these countries has been observed. The empirical results also reveal that in the case of
Tanzania and China, trade openness has a significant positive relationship with environmental
degradation, while in case of the USA and Guatemala, the correlation with urbanization
growth rate is found significant with a negative sign. The ordinary least square result supports
an EKC hypothesis for low and lower middle-income countries. However, they fail to find
any support for the validity of an EKC hypothesis for upper middle income and high-income
countries during the period under the study.

Gasimli et al (2019) were examine the nexus between energy, trade, urbanization and
environmental degradation in Sri Lanka. The bounds testing approach confirms the long-term
relationship among carbon emissions, energy consumption, income, trade openness, and
urbanization in the presence of structural break. The results of the study do not confirm the
presence of the EKC (Environmental Kuznets Curve) hypothesis in Sri Lanka. They find that
energy consumption leads to carbon emissions in both the long term and the short term. Trade
openness is degrading environmental quality, as trade is responsible for the accumulation of
carbon emissions in the atmosphere. The results of the study confirm that urbanization has
been found to have significant and negative effect on carbon emissions.

Afridi et al (2019) examined the impact of per capita income, trade openness, urbanization,
and energy consumption on CO 2 emissions in SAARC region. Annual data from 1980 to
2016 are analysed using appropriate panel data techniques. The results revealed the
presence of environmental Kuznets curve (EKC) in the SAARC region. Trade openness has
negative while urbanization and energy consumption have impacted CO 2 emissions
positively. Moreover, the causality exercise explored a bidirectional causality between
urbanization, energy consumption, per capita income, and CO 2 emissions. Similarly, energy
consumption, per capita GDP, and urbanization are also bidirectionally related.

Jamel & Derbali (2016) investigated empirically the impact of energy consumption and
economic growth on the environmental degradation as measured by CO2 emissions. They
were utilized the cointegration test, the fully modified OLS taking the period 1991–2013.
They find that the cointegration tests confirm long run relationship among environmental
degradation and energy consumption and economic growth along with financial
development, trade openness, capital stocks, and urbanization as control variables.

The conclusion of the mentioned literature review revealed that energy consumption,
urbanization, trade openness and industrial output having tremendous impact on environment
degradation. These variables having different results in different economies i.e. developed,
developing and poor economies. Due to environmental degradation there are number of other
factors that were also studied in the literature like the employment of the masses, FDI,
financial development, life expectancy and so many others. The main concern of this study is
to check either energy consumption, urbanization, trade openness and industrial output are
associated with environmental degradation in SAARC countries or these factors having no
impact on environmental degradation. The literature summarized that environmental
degradation effected by energy consumption, urbanization, trade openness and industrial
output differently effect in advance economies because there having established institutions,
in poor and developing economies energy consumption, urbanization, trade openness and
industrial output having inverse impact with in environmental degradation due to poor
institutions. Some economies having no relationship found between energy consumption,
urbanization, trade openness and industrial output with environmental degradation in the
literature.