A review and analysis of renewable energy policies and CO2 emissions of Pakistan

Abstract

Pakistan's electricity sector is facing challenges including the demand-supply gap and frequent power outages, increasing power-related fuel import bills, and increasing environmental emissions. The electricity sector is the biggest contributor to the overall emissions in Pakistan. To meet its carbon dioxide (CO2) emissions reduction target as agreed in the Paris Agreement, Pakistan has initiated various energy policy incentives and mechanisms to support renewable power generation. However, currently, the share of thermal generation in the electricity supply mix is over 63%. Therefore, it necessitates having a log-term assessment of these policy incentives and mechanisms to ascertain whether or not the CO2 emissions reduction target will be met. We utilized a dynamic model to analyze the endogenous interactions among generation technologies, fuel resources, demand, capital investments, CO2 emissions, production costs, and electricity prices. We developed and evaluated a reference scenario focused on current policies and local conditions and an alternate scenario focused on the use of indigenous resources and low carbon technologies. Contrary to the expectations of policymakers, the reference scenario neither helps Pakistan to achieve the CO2 emissions reduction target by the compliance year 2030 nor provides any relief to the users of electricity. On the other hand, in an alternate scenario, Pakistan can sustainably achieve the emission target and the users of electricity can save about 23% per annum on their electricity bills. Finally, policy implications and recommendations for the policymakers are presented that can equally be applied to other countries with similar electricity system dynamics.