ENERGY TRANSITION AND CLIMATE CHANGE DYNAMICS IN PAKISTAN: IMPLICATIONS FOR SUSTAINABLE ECONOMIC GROWTH
Abstract
This study examines the dynamic relationship between climate change, energy transition, and economic growth in Pakistan using a time-series framework. Climate change is proxied by carbon dioxide (CO₂) emissions, while energy transition is measured by the share of renewable energy in total final energy consumption. Annual data covering the period 1990–2023 are obtained from the World Development Indicators. To capture both short-run and long-run dynamics, the autoregressive distributed lag (ARDL) bounds testing approach to cointegration is employed. The empirical results indicate the existence of a stable long-run relationship among climate change, energy transition, and economic growth. Findings reveal that energy transition contributes positively to economic growth while significantly reducing CO₂ emissions in the long run, supporting the notion of sustainable growth. In contrast, higher carbon emissions are found to exert an adverse effect on economic growth, highlighting the environmental cost of fossil-fuel-based development. Short-run dynamics show adjustment towards long-run equilibrium, as confirmed by the error correction term. The study offers important policy implications, suggesting that accelerating renewable energy adoption and improving energy efficiency are crucial for achieving climate-resilient and sustainable
Keywords: Climate Change; Energy Transition; Renewable Energy; Economic Growth; CO₂ Emissions; ARDL Model; Time-Series Analysis; Pakistan.
