Can Pakistan Move from Fossil Fuel to Renewable Energy: Prospects, Progress, and Policies?

Abstract

Pakistan’s energy utilization grew substantially over the past two decades because of industry, transport, and agriculture. For this, the government approved short and long-term energy policies based on Pakistan’s Visions and power projects with the China-Pakistan joint energy group, Pakistan-Iran, and Central Asia-South Asia. The prior has revealed Pakistan to foreign fuel price shocks and ecological degradations. By applying translog production function, study tries to discuss either Pakistan can form its economy on renewable energy (RE)? Is it feasible to substitute nonrenewable energy (NRE) for RE? What are the impacts of RE and NRE on carbon emissions? The aim is to provide the relationship between two energy inputs and to give policy recommendations to the government to economy, energy security, and ecological viability. The outcomes show: impact of RE and NRE on economy is positive; output elasticity between RE and NRE factors are elastic and averagely are estimated by 0.0969 and 1.007; substitution between energy factors show positive change with an average of 0.852, which present that Pakistan has the potential of moving from NRE to RE; scenarios present significant results, and inputs show strong convergence differences in technical progress overtime. Based on empirical analysis, further policies are provided below.