This study explores the symmetric and asymmetric effects of the shadow economy on clean energy and air pollution of South Asian countries over the period 1991–2019. The short-run ARDL findings for the clean energy model suggest that shadow economy increases clean energy consumption in Pakistan and Sri Lanka, whereas this effect is negative for India and insignificant for other countries. The long-run results indicate the adverse impact only for India and the effects of tax revenue on clean energy are positively significant in Sri Lanka while negatively signiicant in Nepal and Bangladesh. Institutional quality significantly increases clean energy in Pakistan, India, and Nepal. However, in the case of Pakistan and Nepal, institutional quality deteriorated the environmental quality. The results for the pollution model confer that shadow economy increases emissions in Pakistan, decreases in Bangladesh and Nepal, and has no effect in India and Sri Lanka. The nonlinear ARDL results reveal that the positive components of the shadow economy significantly increase clean energy consumption only in Pakistan; however, the negative components of the shadow economy are negatively significant in all countries except Sri Lanka and Nepal. However, the negative component of the informal sector of the economy reduces CO2 emissions in India and increases CO2 emissions in Bangladesh and Nepal. The results offer important policy implications for achieving clean energy and better environmental quality in South Asian countries.

Modern advances in nonlinear modeling have exposed that nonlinear models yield more robust results compared with linear models. Research on the effect of air-railway transportation on environmental pollution has now arrived into a new way of asymmetry analysis and captured the real issue among the nexus. This study aims to inspect the asymmetric impact of air-railway transportation on environmental pollution in Pakistan by using annual time series data from 1991 to 2019. The findings show that positive shock in air passenger carried and railway passenger carried increases carbon emissions, which implies that 1% increase in air passenger carried (railway passenger carried) enhances environmental pollution by 0.21% (0.32%) in long run in Pakistan. While positive shock in railway passengers carried increases environmental pollution and negative shock in railway passengers carried decreases the environmental pollution in the short run. The outcomes have also confirmed the short- and long-run asymmetries in Wald statistics. The findings are country-specific and it would be regionally specific.