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Reevaluating energy progress: An in-depth policy framework of energy, urbanization, and economic development

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  • Tian, Jiarui
  • Abbasi, Kashif Raza
  • Radulescu, Magdalena
  • Jaradat, Mohammad
  • Barbulescu, Marinela

Abstract

Pakistan has challenging energy-related economic concerns, including accessibility, affordability, and sustainability, all of which significantly impact the country's economic development and growth prospects. This study seeks to uncover the intricate link between energy use, power costs, urbanization, alternative energy consumption, and economic development from 1970 to 2018. Utilizing the Autoregressive Distributed Lag (ARDL) approach, Frequency Domain Causality (FDC), and Innovative Accounting Approach (IAA), the research finds that energy use and urbanization positively impact economic development in the short and long term. Conversely, alternative energy consumption declines in the short run, while rising power costs negatively affect long-term economic development. FDC results indicate that rising power costs affect economic development in the short, medium, and long run, while urbanization has a long and short-term and energy use has a long- and medium-run impact on economic development in Pakistan. IAA aligns with ARDL and FDC hypotheses. This underscores the vital role of energy use and costs in economic activity, emphasizing the need for prudent urbanization and strategic alternative energy integration in long-term policy for Pakistan.

Suggested Citation

  • Tian, Jiarui & Abbasi, Kashif Raza & Radulescu, Magdalena & Jaradat, Mohammad & Barbulescu, Marinela, 2024. "Reevaluating energy progress: An in-depth policy framework of energy, urbanization, and economic development," Energy Policy, Elsevier, vol. 191(C).
    • Handle: RePEc:eee:enepol:v:191:y:2024:i:c:s0301421524002167
    DOI: 10.1016/j.enpol.2024.114196
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