Who Owns the Air? Governance Failures, Corruption, and the Tragedy of the Environmental Commons in Pakistan

Abstract

Drawing on the framework of the tragedy of the commons, this study examines the effects of urbanization, energy structure, and governance quality on carbon dioxide (CO₂) emissions in Pakistan. Using annual time-series data from 1996 to 2024, the analysis explores the dynamic interplay between energy consumption, renewable energy penetration, urban population growth, and institutional dimensions, including government effectiveness, rule of law, and control of corruption. The empirical estimation employs Robust Least Squares to address potential heteroskedasticity and mitigate the influence of outliers, ensuring parameter stability and robust inference. The results indicate that urban population expansion and greater renewable energy adoption significantly reduce per capita CO₂ emissions, highlighting the environmental benefits of sustainable urban development and clean energy transition. Governance indicators exhibit heterogeneous effects: the rule of law and corruption control are positively associated with emissions, suggesting that institutional strengthening may initially stimulate economic and energy-intensive activities in the absence of stringent environmental enforcement. After controlling for structural and institutional factors, per capita energy consumption does not exert a statistically significant independent effect on emissions. The findings underscore that governance reforms must be aligned with explicit environmental objectives to ensure that institutional improvements contribute to emission mitigation rather than unintentionally reinforcing carbon-intensive growth. By integrating urban dynamics, energy structure, and institutional quality into a unified analytical framework, the study advances the growth–environment discourse in developing country contexts and provides policy-relevant insights for Pakistan’s long-term environmental sustainability.

Keywords: Carbon emissions; Urban growth; Energy transition; Fiscal governance; Institutional effectiveness; Pakistan.