Master of Science in Economics

Faculty / School

School of Economics and Social Sciences (SESS)


Department of Economics

Date of Submission



Dr. Heman Das Lohano, Institute of Business Administration, Karachi

Project Type

MSECO Research Project

Access Type

Restricted Access

JEL Code

Q4, Q41, Q42, Q43, Q48, Q54


Energy transition from a developing economy perspective requires not only the understanding of energy policy but also the understanding of economic opportunities forgone in the process of transition. In contrast to developed countries, developing countries have to cater to a wider range of issues in energy transition. This research develops a thematic review of literature on energy and climate change and its associated link. The literature has transformed over the period to address the pressing concern of energy generation mix in Pakistan and its link to the climate change. In this paper, univariate time series model is used to estimate the growth rate of electricity consumption and carbon dioxide emissions in Pakistan. For both electricity consumption and carbon dioxide emissions, random walk model with drift is applicable based on time series properties of these. The trend analysis, descriptive statistics and governmental policy analysis indicates that electricity consumption is expected to increase which needs to be met by generation from conventional fossil fuels and clean energy. The paper discusses the energy generation mix transition over the past decade and expected changes in the future to meet increasing demand for electricity. The findings of this paper highlight the importance of energy transition in Pakistan. The paper also highlights the importance of investing in renewable energy, issues in upscaling renewable energy, and the challenges of renewable intensive energy mix. The paper also discusses upcoming capacity additions and expected energy mix as discussed under the Indicative Generation Capacity Expansion Plan 2018 – 2040 showing surge in coal power generation in the future. This paper also sheds light on the Intended Nationally Determined Contribution (INDC) targets and forecasts on greenhouse gas emissions sent by Pakistan in 2016 as a response to Paris agreement. Furthermore, this paper also discusses the emissions by different carbon fuels and levelized cost of recent power projects that impact the feasibility of the industry. Lastly, this paper concludes with the concept of optimal energy mix in energy transition process for a country like Pakistan and suggested energy policy recommendations.


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