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This paper explores the relationship between urbanization, CO2 emissions and energy consumption in South Asia for the period of 1983 to 2013, using Panel Co-integration and Granger causality approach. A long-run relationship exists between CO2, energy consumption and urbanization. The empirics also indicate that energy consumption and economic growth are playing a significant role in degrading the environment while trade is improving its quality. Bidirectional causality exists between CO2 and energy, and between urbanization and CO2 emissions both in the short run and long run.