LAUSR

Abstract Critics have investigated the relationship between fossil energy and conflicts, incorporating political, military, economic and social factors that have led to these clashes. Nevertheless, to our knowledge, no econometric study has examined the causal relationship between renewable or fossil energy and conflicts such as terrorism in the case of Pakistan. This paper examines the relationship between terrorism, renewable energy and the consumption of fossil energy in Pakistan, taking into consideration several factors such as economic growth and income inequality. This study uses the autoregressive distributed lag (ARDL) testing approach to examine the long-term relationship between the considered variables over the annual period of 1980-2015. The Wald test confirms the existence of long-term relationships between our variables. Granger causality reveals long-term bi-directional causalities between all variables. Although, in the short term there are bidirectional causal links between renewable energy and fossil energy, the study shows that there are short-term unidirectional causalities running from terrorism and fossil energy to GDP, from GDP to renewable energy, and from income inequality to fossil energy. In fact, long-term parameter indicates that fossil energy reduces terrorism and that renewable energy consumption increases fossil energy. In contrast to the long-term parameter, the study reveals that economic growth increases terrorism in Pakistan. Moreover, this project suggests that Pakistan continue to encourage the use of renewable and fossil energies by (or through) intensifying its diplomatic efforts to resolve political and military conflicts around the world, particularly in the Middle East.