The Paradox of Progress towards SDG7: Governance Quality and Energy Poverty Dynamics in Pakistan

Abstract

This study investigates the multidimensional aspects of energy poverty in Pakistan from 2000 to 2022, specifically evaluating the direct, indirect, and total effects of socioeconomic and environmental factors. We employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the impacts of income, population, governance quality, energy intensity, fuel prices, and renewable energy consumption on energy poverty. The study further contributes by examining the mediating role of governance quality and developing the World Governance Indicators (WGI) Index. The findings indicate significant negative effects of energy intensity and renewable energy consumption on energy poverty. Conversely, population growth and income levels demonstrate positive effects, contradicting conventional economic development and energy access assumptions. Governance quality establishes direct and indirect effects that mediate most relationships between independent variables and energy poverty. Bootstrapping analysis confirms the significance of governance quality as a mediator. The model describes significant energy poverty variance with robust predictive relevance. This study emphasizes the need to adopt a comprehensive strategy to decrease Pakistan’s energy poverty by articulating socioeconomic, environmental, and governance factors. Our findings offer valuable information for policymakers to achieve UN Sustainable Development Goal 7, embarking on governance reforms, promoting sustainable growth, and enforcing investments in energy efficiency and renewable sources as Pakistan approaches the 2030 SDG 7 deadline.