Global Energy Transition and the Role of Energy Mix in Creating Energy Crisis in Pakistan

Abstract

The reliance on non-renewable energy sources is the influence scheming international energy markets and macroeconomic dynamics. Developing economies remain volatile to energy markets due to their heavy reliance on non-renewable energy sources and their low capability to maintain stable energy stock and expensive energy mix, such as Pakistan. The application of autoregressive distributed lag shows that the impact of the energy mix has a significant positive impact on the energy crisis of Pakistan in the long run. Which means that at the macroeconomic perspective only increasing prices of energy have adverse effects, whereas in the short run energy mix shows a significant negative impact on the energy crisis, implying artificial and unsuitable short term ad-hoc adjustments. Therefore, the reluctance in transforming towards the renewable energy sources and ad-hoc adjustments in the formation of the energy mix is a factor of energy crisis in the country.