The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous Oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach

No one can deny the progression and innovation in the aviation transportation collected at national and international level. But the accountancy of the impact of air transportation on environmental degradation is naive and emerging trend of the current era. The air transportation versus environment is the key contribution to the literature that is solely conducted for Pakistan first time in this context. The objective of this research is to compute the impact of air transportation on carbon dioxide emissions, nitrous emissions and methane emissions separately in the three models by applying ARDL bound test approach during 1990 to 2017. The result depicts significant and positive relation of air transportation (carriage) to carbon dioxide emissions (0.77), nitrous emissions (0.20) and methane emissions (0.38) in long-run. The short-run results infer that the air transportation (passenger) has significantly positive relation to carbon dioxide emissions (0.278), nitrous emissions (0.207), and methane emissions (0.080). The econometric outcomes show the significant and direct relation to transportation (both passenger and cargo) to carbon dioxide, methane, and nitrous oxide emissions in short and long-run. Moreover, per capita GDP, population density, and energy demand also significantly affect the environment showing significant and positive coefficients to all three categories (carbon dioxide, methane, and nitrous oxide) of emission. In case of Pakistan, FDI and trade for this duration didn’t significantly contribute to the CO2, NO2, and methane emissions. Since the last decade the economic issues of Pakistan like terrorism, political instability, energy crises, and poor management along with the worst performance by tertiary sectors have severely hit the economy, and as a result, the FDI and trade sector has tormented in a substantial proportion. Finally, pairwise Granger causation also supports the short and long-run consequences. The outcomes suggested that the fuel-efficient energy use and technological diversification in the transportation sector are essential to mitigate the degrading environmental emissions.


Introduction
Air transportation refers to the movement of passengers and cargo within the nation and foreign nation by aircrafts such as airplanes and helicopter. The transportation system is considered as a backbone of the economy in revenue generation as well as a medical link as central and vital for certain industries and services. The key economic integration and development can easily be measured by the transportation facility and efficiency regarding economic and environmental cost. The growth rate of population is far beyond to meet the demand of transportation which results in the high commercial transports using substandard and fossil fuel as energy that emits high carbon and other dangerous emissions (Maddalon, 2014). Air transport enables In initial stages of aviation projects, the World Bank had provided funds for air crafts for publicowned and groundwork projects. With the trade openness, liberalization and high demand of air transportation by emerging worldwide population led the phenomena of privatization, and as a result, the World Bank shifted its funding to other investments like the capacity edifice, strategy, and governing support. The WBG's Air Transport Portfolio amount was US$1.47 billion in 2015, a rise of 2% from 2014. Major current projects by World Bank include the aim to promote safe and efficient air travel by refining aviation infrastructure, administration, and procedures (World Bank Air Transport Annual Report, 2015).
The aviation industry uses the huge amount of fossils fuels and million barrels of oil every day. The Burning of fossils fuel currently contribute 2.5 percent of carbon emission and is expected to rise 22 percent by 2050 only by a single nation US. Moreover, the increasing demand and population put more pressure on the transportation via air crafts. The divesting dilemma is that like other industries the alternative energy options (like solar not coal and LED not light bulbs) cannot be used in the aviation industry and there is no way out without burning off a lot of dirty kerosene in aircraft. Though, airplanes are becoming more fuel efficient but even cannot meet the required need of the current growth. The aviation commerce accounts for 11 percent of transportation linked emissions in the US. According to NASA landing and taking off emits 25 percent of airplanes emissions that is 0.9 metric tons of carbon per single passenger and for sustainability, it requires an investment of wind farm of $10.75 and forest conservation of $8.95. Business class and first class airplanes emit nine times more fuel than economy class. Furthermore, the former acquire more fuel consumption and less space than the later movement of aircraft. The biofuel can lower the carbon emission by 60 percent along with clean transportation and fuel efficiency (Byrne, 2017).
According to Shahbaz et al., (2015) total energy consumption consumed by transportation is 33%. Gasoline and diesel use by total passenger cars about 13%. The road transport uses heavy fuel oil, bunker fuel which corresponds to 60% of consumption of water transport. Energy consumption in transportation adversely affects the environmental quality. The transport industry is contributing to environmental degradation by releasing many harmful gases into the

Syeda Anam Hassan, Misbah Nosheen
The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach 9 atmosphere. These include carbon dioxide (CO2), methane (CH4), carbon monoxide (CO), nitrogen oxides (NO), nitrous oxide (N2O), chlorofluorocarbons (CFCs), heavy metals (zinc, chrome, copper, and cadmium) (Zvijakova, 2014). Aircraft during flights cause emissions of GHG extensively that contribute to global warming and conventional air pollution by highaltitude aircraft emissions as Nitrogen oxide, carbon monoxide, and hydrocarbons. Road transport accounts for 25% of energy usage of transport, 16% by heavy vehicles, and 9% by medium Trucks. High growth in transport volume leads to decreasing air pollution due to various vehicle standards in different countries (Hill et al., 2011). In the developed countries effective measures are introduced to combat urban air pollution. Traditional pollutants have been brought under control in many developed countries. New machinery and technologies are adopted by developed countries which do not emit excessive pollution. So air pollution in such countries is either better or at least decreasing the pollution or both. As people get richer, their priorities change, after sustaining basic needs of food, clothing, water, and shelter people can begin to confer importance to other constituents in total welfare comprising the environment. Therefore, communities will be more willing to deal resources in this regard. For example, Unites States make expenditures to combat pollution nearly 2% of US GNP (Beckerman, 1992). Worldwide, international transport results in 33% of trade-related emissions, especially in the manufacturing sector. For example, 80% of trade-related releases in equipment are due to the international transportation (Cristea et al., 2013). International trade is liable for Green House Gas (GHG) emissions because of the production of exported goods and the carriage of these goods between dealing partners. During the trade, the production and the delivery of the product have a massive impact on global warming. Sim et al. (2007) estimate that Kenyan Guatemalan beans shipped to the UK and its impact on global warming are 20-26 times larger than UK production. But the goods and partner composition of trade has an impact on categories of transportation and also on GHG emissions. The emissions release also depend on the volume of the product and mode employed, not on value, e.g., one million dollars of coal is weightier than a million dollars of a microchip with more substantial carriage emissions. Beside this, twothirds of trade emissions of US is due to transportation. And worldwide, transport apparatus, electric equipment, machinery, and manufacturers are responsible for 75% of trade-related emissions (Cristea et al., 2013). The major cause of worsening of the environment in developing nations is the rising population with low labor productivity, inequality in income distribution and high unemployment. For example, burning forests and converting them into cropland which leads to an ecological imbalance in using the land. Growth in population also leads to deforestation because of over-harvesting of fuelwood from forests; this further leads to soil erosion and flooding in hilly areas. Thus the pressure of population on such economies results in the straining of environmental resource base beyond its carrying capacity (Sengupta, 2010).
Green growth is the growth and development to promote the economic growth while making certain that natural assets endure delivering the resources and environmental services for the wellbeing. Green growth results in increasing the efficiency and productivity of natural resource utilization, natural capital used within ecological limits, reduces adverse environmental impact and improves natural management. Green growth policies are in action in places like Sri Lanka, Bangladesh, Nepal, Azerbaijan, Ghana, and Pakistan (Hynes and Wang 2012).
In case of Pakistan, the air travel contributed to 40% of carbon emissions .The environmental damage by air transportation happens for the reason that aircraft engines release heat, particulates, and emissions which add ecological variations and global warming. Air transportation releases particles and gases like carbon dioxide, water vapor, carbon monoxide, hydrocarbons, sulfur oxides, nitrogen oxides, lead, and black carbon (Higham, at al., 2016). The government should take an effective step regarding the current transportation and environmental loss caused by transportation. The government must pay keen attention towards the significant implementation and controlling climate changes.

Syeda Anam Hassan, Misbah Nosheen
The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach 10

Significance of the Study
The demand for air transport is persistently growing, and nations must consent with the costs (pollution, ecological changes, risk, resource usage). Air transportation is considered as a key component of economic growth but at the same time there is an immense need to consider environmental damages. This study targets to investigate the impact of air transportation on environmental emissions using the annual data from 1990 to 2017 for Pakistan.

Objectives
The key objectives of the analysis are:  To find the impact of air transportation carriage on carbon emission, nitrous emission, and methane emission.  To find the impact of air transportation passenger on carbon emission, nitrous emission, and methane emission.  To find the impact of per capita GDP on carbon emission, nitrous emission, and methane emission.  To find the impact of trade on carbon emission, nitrous emission, and methane emission.  To find the impact of energy demand on carbon emission, nitrous emission, and methane emission.  To find the impact of population density on carbon emission, nitrous emission, and methane emission.  To find the impact of FDI on carbon emission, nitrous emission, and methane emission.

Review of Literature
Uddin (2014) observed the causal association between economic growth and carbon emissions in seven SAARC countries during the period 1972 to 2012. By using Johansen cointegration and Vector Error Correction Modeling (VECM) approach, the results exhibit a co-integration relationship between economic growth and environmental pollution. Furthermore, results also demonstrate that the GDP has positive and significant impacts on CO2 emissions in the longrun. These results facilitate the environmental establishments to realize the worse effects of economic growth on the environment and deal the environmental problems using macroeconomic approaches. Bozkurt and Akan (2014) studied the association between Economic Growth, Energy Consumption, and CO2 Emissions in Turkey form 1960-2010. By employing Co-integration investigation, the empirical results show that economic growth is directly and energy consumption is adversely affected by carbon emission. The findings suggest that in order to save the environment from more damage, the government should implement policies to use clean and renewable energy resources. Inglesi-lotz and Bohlmann (2014) studied the long-run relationship between economic growth and environmental quality for South African economy using ARDL approach over the period 1960 to 2010. The study found no evidence for the existence of environmental Kuznets curve in South Africa and concluded that because of its initial level of development, the results might indicate that economy is shaping the initial stage of environmental Kuznets curve. Mehrara et al. (2014) studied to find out the relationship between trade, GDP, and the environment in Iran for the time 1970-2011. Granger Causality test shows significant uni-directional and a long-run and positive relationship between GDP and trade openness to CO2 emissions. This study suggested that Iran tends to control CO2 emission by effective measures that level of trade openness is drop off to combat the environmental degradation. Similarly, Cetin and Ecevit (2015) aimed to find out a relationship between urbanization, energy consumption, and carbon dioxide (CO2) emissions in Sub-Saharan countries for the period 1985 to 2010. By using Pedroni Kao co-integration methods and Granger causality test the results show that there is a bi-directional Granger causality between energy consumption and CO2 emissions. The study indicates that more stern environmental and energy policies should be implemented and develops new policies to use alternative sources of energy. Cheema and Javid (2015) explored the relationship between disaggregate energy consumption,

Syeda Anam Hassan, Misbah Nosheen
The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach 11 economic growth and environment for 8 Asian developing nations over the time frame 1990 to 2012. By using fully modified OLS the results confirm the existence of EKC along with the significant impact of energy consumption on economic growth. This Study recommended that government must make policies regarding renewable energy consumption. Farhani and Ozturk (2015) (2015) studied the impact of three sectors of the economy on the emission of carbon in Pakistan from 1990 to 2013 using Log Mean Divisia Index (LMDI). This study also focused on different fuel types that are used for energy purposes in the main sectors of the economy including agriculture, industrial and services sectors. CO2 emissions increase with the increase in overall economic activity and decrease with the decline in economic activity. This study recommends that energy efficiency policies should be introduced in industrial and services sector of the economy. Chen et al., (2016) explained the relationship of economic growth energy consumption and CO2 emissions for 188 countries by employing panel co-integration and VECM model over the time frame 1993 to 2010. The results found the long-run relationship between variables and negative relationship exists between energy consumption and economic growth in developing nation. There is a uni-directional relationship of energy consumption to CO2 emissions exists for developing and developed the nation. This study recommends economy use should follow the environmental regulations, energy efficient resources to mitigating Green House Gas Emissions (GHGE). Mohiuddin et al., (2016) find out the relationship between energy consumption, GDP and CO2 emission in Pakistan by using time series data from 1971 to 2013. By using Johansen co-integration and vector error correction model (VECM) the results exhibit there is 1% increase in energy production will results 13.7% increase in CO2 emissions. There is found uni-directional causality from energy production to CO2 emission. This study suggested that government should subsidize renewable energy system to mitigate environmental damage. All the past and current research were done on the carbon emissions are solely in the context of a single nation or on panel data by considering general transportation or energy. However, there is a significant gap in the literature for the transportation sector separately as degrading emissions other than carbon emission both at the national level and panel data context.

Data Source and Methodology
The annual data from 1990 to 2017 have been collected from WDI (2017) used for the investigation of air transportation on carbon emissions, methane, and nitrous emissions including the key variable such as GDP per capita, population, energy usage, FDI and trade for Pakistan.
There the three dependent variables which will be estimated one by one in the system of econometric ARDL model.

ADF -Unit Root Test
Time-series data is frequently non-stationary, containing a unit root. Ordinary Least Squares (OLS) estimates are efficient if variables, encompassed in the model are stationary of the same order. Therefore, first, it is desirable to check the stationarity of dissimilar variables in order to get efficient results along with the model selection technique. Therefore, Augmented Dickey-Fuller (ADF) test is employed.

ARDL -Bound Test Approach
This study uses the autoregressive distributed lag (ARDL) model, or bounds testing approach (Pesaran et al., 2001), that is applied to check the existence of short and long-run relationships among the variables. Econometric theory designates a set of variables is cointegrated if there Syeda Anam Hassan, Misbah Nosheen The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach 14 is a linear combination among them without stochastic trend. In this instance, a long-run association subsists among these variables.
The usage of the bounds technique is built on three validations. First, Pesaran et al. (2001) advocated the use of the ARDL model for the estimation of level relationships because the model suggests that once the order of the ARDL is identified, the connection can be estimated by OLS. Second, the bounds test permits a mixture of I(1) and I(0) variables as regressors, that is, the order of integration of suitable variables may not necessarily be the same. Therefore, the ARDL technique has the advantage of not requiring specific identification of the order of the underlying data. Third, this procedure is suitable for finite sample size (Pesaran et al., 2001).
Subsequent Pesaran et al. (2001), we accumulate the vector autoregression (VAR) of order p, indicated VAR (p), for the following growth function: Where z t is the vector of both x t and y t , where y t is the dependent variable defined as carbon, methane and nitrous emissions (X), t x is the vector matrix which represents a set of explanatory variables. Explanatory variables in its turn include Air transportation carried and passenger, per capita GDP, trade, energy demand, population density, and FDI. According to Pesaran et al. (2001), t y must be I(1) variable, but the regressor t x can be either I(0) or I(1).
The existence of long-run relationships is determined by F-stats. The null and alternative hypotheses are as follows: The computed F-statistic value will be evaluated with the critical values tabulated in Table CI (iii) of Pesaran et al. (2001).
If the F-stats exceeds the upper bound there is long-run cointegration, if F-stats is lower than lower bound then there is no long-run cointegration among the variables. However, there is inconclusive range if the F-stats lies between the upper and lower bound. In this case, the error correction term will specify the existence of relationship if it has with negative and significant value. The ECT represents the convergence coefficient means that if there is one percent random shock from independent variables, the shock will be corrected by x percent in each period.
The three econometric ARDL model as a dependent variable carbon dioxide emission, methane emission, and nitrous emission are:

Syeda Anam Hassan, Misbah Nosheen
The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach

15
In the above econometric model, the β0 is intercepted, β1 to β8 are the long run coefficients while from β9 to β16 are short-run coefficients.

ADF-Unit Root
The ADF test shows mix results regarding the significance of the variables recommending the ARDL-Bound test approach. The Methane, nitrous oxide emission and population density are integrated at level while rests of all the variables, i-e integrated at first difference. After unit root ADF, the bound test approach is used to find the long-run co-integration between the variables.

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Similarly, the air transportation passengers have also the positive and significant relation with CO2 and methane emission. The results infer that one percent increase in air transportation passenger leads to increase the CO2 and methane emission by 0.93 and 0.56 percent that is significant at 10% and 1%. NO2 has a negative but insignificant relation. The results are reliable with the analysis of Brouwer et al., (2008) andTalbi, (2017). Higher the landing and taking of airlifts uses extensive fuel combustions that lead to higher polluting emissions which also depends on the fuel standard and type such as oil, petrol, etc. The per capita GDP has positive and significant relation with CO2 and methane emission as shown in the statistical value such that 0.360 and 0.507. It shows that one percent rise in per capita GDP increases the CO2 and methane emission by 0.360 and 0.507 percent respectively that at significant at 1percent and 5percent. Higher the GDP leads to increases the fuel usage in the factories and industries along with many developmental projects that lead to degrading the environment by pollution emissions. In this analysis, the nitrous oxide emission shows negative relation to per capita GDP which means it lowers the NO2 by 0.68 percent that is significant at one percent showing improvement in the agriculture sector. The results are consistent with the study of Lane (2014) The energy demand has positive and significant relation to CO2, methane and NO2 emission that is one percent escalation in energy demand leads to rising the CO2, methane, and NO2 emission by 2.56, 0.975, and 0.204 percent that is at 5 %, 1% and 10% level of significance. This indicates that high energy demand leads to a higher proportion of goods and services that uses energy itself as fuel in different forms. The outcomes are reliable with the analysis of Soytas et al., (2007), Tanczos and Torok (2007) and Shahbaz et al., (2013).
Population density is significantly and positively related to CO2, methane and NO2 emission as the coefficient values are 2.585, 0.729 and 1.867 percent respectively that are all significant at one percent. This means that one percent increase in population density leads to increase the CO2, methane and NO2 emission by 2.585, 0.729 and 1.867 percent. The increase in population density results in higher usage of resources economic and environmental directly and indirectly which leads to emit pollution emissions. This effect is steady with the study of Strazicich and List (2003), Kasman and Duman (2015) and Rahman, (2017).
The FDI throughout the analysis has a very negligible impact on the carbon dioxide, nitrous oxide, and methane emission. The econometric consequences show that one percent increase in FDI increases the methane emission by 0.0029 and nitrous oxide by 0.0017 percent that is significant at 5 and 1 percent. The fact behind the emission is the decline in the FDI over the selected years which show no significant increase in the environmental emissions. The results oppose the study of Hou et al., (2016) and consistent with the study of Appiah et al., (2017). The impact of constant is significant for CO2 and NO2 emission. The above table shows the short-run elasticities of all the independent variables on CO2, methane and NO2 one by one as three models. The air transportation cargo has a positive and significant impact on CO2, methane, and NO2. One percent increase in air transportation increases the carbon dioxide emissions by 0.0844, methane 0.0554 and NO2 by 0.210 that are significant at 1, 5, and 10 percent level respectively. In connotation, to long-run, the short-run results also have a positive and significant relation. In the pretext to long-run results, there is a significant and positive impact of air transportation passenger to carbon and methane emission by 0.278 and 0.080 percent with the significance level of 10 and 5 percent respectively shortrun.

Syeda Anam Hassan, Misbah Nosheen
Similarly, one percent increase in the per capita GDP increases the CO2, methane and NO2 emissions by 1.666, 0.490, and 0.621 percent that is significant at 5, 1 and 10 percent correspondingly. This indicates that increase in the per capita GDP results in the progression of industries (demand side) Devezas et al., (2017). Moving towards the energy demand; one percent increase in the energy demand increases the CO2 emissions 0.308, methane by 0.140, and NO2 by 1.05 percent that is all significant at one percent. The population density also increases the emission significantly and positively by 1.804 to CO2, methane by 0.036 and NO2 by 0.0204 that are all significant at one percent. In short-run FDI has negatively and significant impact on CO2 emissions that is -0.0011 that is significant at 5 percent.

Syeda Anam Hassan, Misbah Nosheen
The Impact of Air Transportation on Carbon Dioxide, Methane, and Nitrous oxide Emissions in Pakistan: Evidence from ARDL Modelling Approach 20 Finally, the Error Correction term has a negative and significant term for the entire models such that for CO2 is -0.69, methane has -0.144, and NO2 have -0.911 that are all significant at one percent. This means that one percent random shock by all the independent variables converge to the equilibrium by -0.69, -0.144 and -0.911 percent for the model where dependent variables are CO2, methane, and NO2 emissions. The R2 shows the goodness of fit of the model that shows that all the independent variables explain CO2 emission by 0.89 percent, methane by 0.97%, and NO2 by 0.99 percent respectively. The CUSUM shows that cumulative sum of randomness. The above plots show the stability of the model that is the plotted lines exist in the critical region signifying the stability of the all the three models.

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The diagnostic test for the serial correlation accept the null hypothesis as the probability statistics for the CO2 model is 0.813, methane has 0.819and NO2 has 0.312. This shows the absence of serial correlation of the considered models. The Heteroskedasticity test such that Breusch-pagan shows the insignificant probability value that accepts the null hypothesis i-e there is no heteroscedasticity. Similarly, the Jarque Bera test of normality and Ramsey RESET (regression equation specific test) also shows that models have no issue of normality and specification. Summing up all the diagnostic test results is acceptable.

Conclusion and Recommendations
As the demand for transport will rise, the energy consumption will unquestionably raise. Energy efficiency procedures are not able to capture all the rise of the demand resulting from this growth. Advancement in refining energy efficiency in the arena of transport is fundamental.
The increase in the transportation sector increases the deteriorating emissions like CO2, NO2 and methane emissions. The consistent increases in the transportation, usage of fuel, and population density shortly would be intense the climate change such as global warming. Fuel usage like gasoline, ethanol, diesel, jet fuel and oil in the aviation sector on each flight emit 75 percent of energy use (Colbeck, 2010). The economic impact of transportation on Pakistan is undeniable, but at the same time, the environmental cost is there which need to be internalized. Evidence from ARDL Modelling Approach 29 selected emissions. Moreover, per capita GDP, population density, and energy demand also greatly influence the environments directly and indirectly thus degrade in a significant ratio. In case of Pakistan, FDI and trade for this duration don't significantly contribute in the CO2, NO2, and methane emissions. Since the last decade the economic issues of Pakistan like terrorism, political instability, energy crises, and poor management along with a worst performance by tertiary sectors have badly hit the economy, and as a result, the FDI and trade sector have suffered in significant proportion. Finally, pairwise Granger causality has been used to check the causation of the variables that also supports the results.
From the root of the current analysis, the policy recommendation can be drawn as; the fuelefficient energy use along with energy management and technological diversification in the transportation sector is essential to mitigate the degrading environmental emissions. Moreover, the air tax such that per fight tax on the ticket should also be added to internalize the externality. This tax in long-run can be used in the proficient energy use that lowers the degrading emissions in the nation. The policy decisions must constructively well-thought-out for a long term, ecological growth and fortune of Pakistan by strengthening the aviation sectors by innovation, modification, dynamic and efficient energy use.

Future Research
The aim of this analysis is to quantify the impact of air transportation on environment degrading emissions like CO2, NO2 and methane only for Pakistan as a time series analysis. The current article is one of the key objectives of my PhD research. The Future research will be conducted on the panel data in order to quantify the impact of these variables on a large scale to recommend effective policymaking that possibly will converge the nations towards environmental quality.