CO₂ Emissions, Urbanization, and Exports as Determinants of Economic Growth in Afghanistan: Evidence from the ECM-ARDL Model (1970–2021) Online First

Abstract

ABSTRACT Sustainable economic growth is one of the key policy objectives in all countries. Afghanistan was identified as one of the most climate-vulnerable countries in the world in 2023. CO₂ emissions—considered the primary source of global warming—have more than doubled in Afghanistan between 1990 and 2022. This study examines the influence of carbon dioxide emissions, urbanization, and exports on Afghanistan’s economic growth over the period 1970–2021, utilizing the Autoregressive Distributed Lag (ARDL) model. The findings indicate that CO₂ emissions have a positive effect on GDP per capita in both the short and long run. Regarding urbanization, the results show that an increase in the urban population significantly reduces economic growth in both periods. While the impact of exports on economic growth is statistically significant in the short run at the 5% level, no such relationship is confirmed in the long run. The results also reveal that Afghanistan entered a phase of growth and expansion after 2001; however, the effect of gross capital stock on economic growth has declined in the post-2001 period, primarily due to inefficiencies, corruption, and other structural challenges. These findings offer valuable insights for policymakers in designing and implementing sustainable development strategies.