Heterogeneous effects of FDI, energy poverty, and resource rents on agricultural environmental degradation in Pakistan: Quantile regression evidence

Abstract

The energy–environment nexus has received empirical attention; however, limited evidence explains how geographically contingent factors, including foreign direct investment, energy poverty, resource depletion, resource rents, and renewable energy, collectively shape agriculture-related environmental degradation. This research explores the heterogeneous impact of foreign direct investment, economic growth, traditional energy use, resource depletion, natural resource rents, renewable energy consumption, and renewable energy production on Pakistan’s agricultural environmental degradation using annual data from 1990 to 2021 from the World Bank’s World Development Indicators (WDI) database. Quantile regressions at the 25th, 50th, and 75th percentiles were used to examine heterogeneous impacts across low-, medium-, and high-emission regimes in Pakistan. The heterogeneous results indicate that foreign direct investment increases environmental degradation. Economic growth increases emissions across all quantiles, demonstrating that Pakistan’s economic growth trajectory remains environmentally intensive. Environmental degradation in Pakistan increases with natural resource rents, suggesting that resource dependency and governance conditions affect environmental conditions. Energy poverty contributes to higher emissions by intensifying inefficient energy demand in agriculture. Renewable energy consumption and production mitigate emissions in Pakistan. The results underline the need for an integrated geospatial and sustainability framework to align green FDI reforms (Sustainable Development Goal 9), renewable energy expansion (SDG 7), responsible resource management (SDG 12), and climate action strategies (SDG 13) to reduce environmental degradation in Pakistan and advance progress toward the Sustainable Development Goals.