This study aims to conduct a thorough examination of Pakistan’s energy sector, with a specific focus on renewable energy (RE) and nonrenewable energy (non-RE) sources. It intends to delve into the potential of solar and hydropower resources within Pakistan and their capacity to mitigate the effects of climate change, thus centering the discussion on RE, particularly solar and hydropower. Adopting secondary data sources, this study seeks to provide a comprehensive analysis of the current state of Pakistan’s energy sector and the challenges that it faces. One of the key findings highlighted in the analysis is the serious problem within Pakistan’s energy sector: existing institutions struggle to cope with the increasing demand for energy owing to insufficient growth in power generation capacity. This inadequacy has led to an increase in CO2 emissions, primarily driven by the country’s growing reliance on fossil fuels to meet its energy needs. Despite this challenge, Pakistan possesses substantial potential for Resources, particularly solar energy and hydropower. Following an evaluation of renewable energy resources, this study proposes recommendations to support the adoption and utilization of renewable energy as a critical component of sustainable growth. These suggestions are geared toward accelerating the transition to renewable energy sources, thus positioning Pakistan for a more sustainable and resilient energy future. This research paper underscores the urgency of addressing the shortcomings in Pakistan’s energy sector and emphasizes the pivotal role of renewable energy, especially solar and hydropower, in mitigating climate change and fostering sustainable development. By leveraging its abundant renewable energy resources and implementing strategic measures, Pakistan can chart a path toward a more environmentally friendly and economically viable energy landscape.