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Energy efficiency and factor productivity in Pakistan: Policy perspectives

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  • Raza, Muhammad Yousaf
  • Lin, Boqiang

Abstract

Energy efficiency shows tremendous potential for enhancing economic growth while also conquering the emissions of greenhouse gases. It is generally acknowledged that Pakistan's decarbonization has to be escorted by energy efficiency developments. This study analyzes key factors behind the energy consumption variations at the sectorial level, such as agriculture, industrial and services that consume almost 70% of Pakistan's final energy. The logarithmic mean Divisia index method is applied to detect the impacting variables (i.e., energy intensity, economic activity, labor productivity, and employed labor), which oversee energy consumption for 2000–2020. Results show (1) the observed sectors provide a positive energy intensity at the maximum period, which is the main reason for negative economic activity. (2) Significant and optimistic labor productivity appeared during 2000–2020, which could be discussed due to an upsurge in capital investment and economic activity liable for increasing productivity. (3) Each factor's ratio increases in which labor productivity and economic activity present maximum input, excluding the epidemic period. (4) The sectorial energy efficiency accounting system under current energy consumption declined by 40.7 Mtoe because of COVID-19. Finally, the study provides policies linked to energy efficiency, pollution reduction, and economic sustainability based on empirical results.

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  • Raza, Muhammad Yousaf & Lin, Boqiang, 2022. "Energy efficiency and factor productivity in Pakistan: Policy perspectives," Energy, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:energy:v:247:y:2022:i:c:s0360544222003644
    DOI: 10.1016/j.energy.2022.123461
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    Cited by:

    1. Mushtaq, Zulqarnain & Wei, Wei & Jamil, Ihsan & Sharif, Maimoona & Chandio, Abbas Ali & Ahmad, Fayyaz, 2022. "Evaluating the factors of coal consumption inefficiency in energy intensive industries of China: An epsilon-based measure model," Resources Policy, Elsevier, vol. 78(C).
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    3. Jamshid Ali Turi & Joanna Rosak-Szyrocka & Maryam Mansoor & Hira Asif & Ahad Nazir & Daniel Balsalobre-Lorente, 2022. "Assessing Wind Energy Projects Potential in Pakistan: Challenges and Way Forward," Energies, MDPI, vol. 15(23), pages 1-21, November.
    4. Muhammad Yousaf Raza & Yingchao Chen & Songlin Tang, 2022. "Assessing the Green R&D Investment and Patent Generation in Pakistan towards CO 2 Emissions Reduction with a Novel Decomposition Framework," Sustainability, MDPI, vol. 14(11), pages 1-19, May.
    5. Navid Rezaei & Abdollah Ahmadi & Mohammadhossein Deihimi, 2022. "A Comprehensive Review of Demand-Side Management Based on Analysis of Productivity: Techniques and Applications," Energies, MDPI, vol. 15(20), pages 1-28, October.
    6. Teng, Yuqiang & Lin, Boqiang, 2024. "The energy-saving effect of industrial chain synergistic division: Evidence from China's industrial chain," Energy Policy, Elsevier, vol. 185(C).

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