Investigating the interaction effect of urbanization and natural resources on environmental sustainability in Pakistan

Natural resource extraction has raised serious environmental-related concerns among policy analysts and environmental economists. To further clarify whether or not natural resource rent affects environmental sustainability, this study investigates the potential impact of natural resource rent on environmental sustainability by addressing the interaction effect of urbanization and natural resource rent for data spanning from 1971 to 2017 in the context of Pakistan. Ecological footprint, carbon emissions, and carbon footprint are used as indicators for environmental sustainability. The application of the dynamic autoregressive distributive lag method infers that the natural resource rent contributes to carbon emission and alternatively urbanization helps pollution mitigation. The interaction between urbanization and natural resource rent plays a moderating role in reducing carbon dioxide (CO2) emissions, ecological and carbon footprint. The co-efficient value of natural resources, urbanization and interaction effect of urbanization with natural resource ranging from 0.021 to 0.788; 0.287 to 1.689 and 0.033 to 0.320, respectively. The study invites the attention of policymakers toward more sophisticated policies regarding sustainable natural use, controlling environmental pollution, and keeping urbanization intact.