Over the last few decades, the share of Carbon emissions shows increasing trend in the total greenhouse gases which led to climate changes across the globe and particularly in Pakistan. The purpose of this thesis is threefold: i) to explore the trend of carbon emission in Pakistan with reference to historical policy changes especially environmental policies; ii) to empirically examine the Environmental Kuznets Curve (EKC) hypothesis using ARDL Bound testing approach for Pakistan over the period 1970-2015; and iii) to decompose the carbon emissions into its driving factors over the period 1970-2013 by using LMDI method. The results have shown that there exist an EKC in the long run as well as in the short run for Pakistan. The decomposition analysis suggests that population effect and economic growth effect are the major factors towards the positive changes in CO2 emissions in Pakistan. In addition, energy intensity has negative impact on CO2 emissions. The analysis reveals that increase in the use of renewable energy source is best strategy to achieve sustainable economic development in Pakistan. Supervisor:- Dr. Nasir Iqbal