Influential Role of Energy Sources on the Economic Development of Pakistan; A Comparative Analysis of Renewable and Non-Renewable Energy Consumptions

Abstract

The purpose of this study is to analyze the empirical effects of renewable and non-renewable energy consumptions on economic growth of Pakistan. To achieve this objective, time series data for the period of 1986 to 2015 is considered using Autoregressive Distributed Lag (ARDL) approach of cointegration with error correction model that offer short run and long run estimations. Results indicate that renewable energy consumptions along with dry natural gases turned out to be more prominent factors in effecting the economic growth positively for short and long run. However, kerosene oil and liquid petroleum gases have insignificant effects on economic development for both periods. Therefore, this study suggests that Pakistan should lower the intake of non-renewable energy consumptions sources to achieve and sustain higher economic proficiency.

Keywords: Renewable energy consumption; non-renewable energy consumption; gross domestic product; Autoregressive Distributed Lag; error correction model