Symmetric and Asymmetric Impacts of Commercial Energy Distribution from Key Sources on Economic Progress in Pakistan

Abdul Rehman,Rasim Ozcan,Magdalena Radulescu,Ilhan Ozturk,Waqar Badshah

doi:10.3390/su132212670

Abdul Rehman, Rasim Ozcan + Show 3 more

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https://doi.org/10.3390/su132212670

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Abstract

This paper aims to determine the interaction of commercial energy distribution, including the installed capacity of hydroelectric energy, hydroelectric energy generation, the installed capacity of thermal energy, thermal energy generation, the installed capacity of nuclear energy, and nuclear energy generation, with economic progress in Pakistan over the 1970–2019 period. Both linear and non-linear autoregressive distributed lag models were used to ascertain the symmetric and asymmetric short- and long-run effects. The findings from the linear autoregressive distributed lag model analysis revealed evidence that increases in the installed capacity of nuclear energy, alongside higher levels of hydroelectric energy generation and thermal energy generation, have positively affected economic growth in the short run, while a greater installed capacity of nuclear energy has positively affected economic growth in the long run. The findings from the non-linear autoregressive distributed lag model analysis showed that negative shocks to installed capacities related to hydroelectric, thermal, and nuclear energy reduced economic growth, while positive shocks to hydroelectric energy generation and the installed capacity of nuclear energy boosted economic growth in the short run. Furthermore, in the long run, negative shocks to the installed capacities of hydroelectric and thermal energy reduced economic growth, negative shocks to the installed capacity of nuclear energy enhanced economic growth, and positive shocks to hydroelectric energy generation and the installed capacity of nuclear energy have stimulated economic growth in Pakistan.

Highlights

The results show that the installed capacity of hydroelectric energy, thermal energy generation, and nuclear energy generation had the opposite link to economic growth in Pakistan
The positive and negative shocks caused by changes in the installed capacity of nuclear energy had both a constructive and adverse relationship with economic progress, with coefficients of 0.922 and −12.445 and p-values of 0.026 and 0.014
The major intension of this analysis was to determine the interaction of commercial energy distribution, including the installed capacity of hydroelectric energy, hydroelectric energy generation, the installed capacity of thermal energy, thermal energy generation, the installed capacity of nuclear energy, and nuclear energy generation, with the economic growth of Pakistan by taking annual data for the period 1970–2019

Summary

Introduction

Pakistan can effectively handle the country’s energy crisis by improving energy production and grid transmission capabilities. Oil scarcity has a knock-on impact on the economy. Because of the recent energy restructure, the energy industry is suffering a supply shortfall and is seeking solutions to increase production while cutting costs. Pakistan’s reliance on fuel mix imports, such as energy, local coal, and re-gasified liquefied natural gas, has reduced in recent years. Pakistan’s whole energy balance is shifting away from dependence on natural gas. The shift in the energy balance might be attributed to a reduction in natural gas reserves and liquefied gas primer [1]. Pakistan’s power sector is in a slump and has experienced a number of challenges in recent years.

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