Abstract/Description
Purpose: In recent years, increasing concerns regarding environmental degradation have propelled the adoption of renewable energy. Yet, due to a multitude of socioeconomic factors, the ratio between non-renewable and renewable energy consumption remains low. Government policy decisions can be a good catalyst in this regard. Therefore, the current study investigates the Asymmetric effect of Monetary Policy on Renewable Energy Consumption in Pakistan.
Study design/methodology/approach: The study covers annual data from 1990-2021 and uses a Non-linear ARDL approach.
Findings: The Findings from the analyses document that in Pakistan, positive shocks in Monetary Policy i.e. broad money have a significant growing impact on the use of renewable energy, whereas a detrimental shock in Monetary Policy does not significantly increase sustainable energy sources consumption in the long-run. Thus, the Central bank through monetary policy in Pakistan must be persistent and sustainable to foster renewable energy consumption.
Originality/value: Lately, the researchers have shown growing interest in investigating the drivers of the use of renewable energy. However, the investigation of monetary policy as the driver of the use of renewable energy is less known, and this study adds to the body of knowledge in this domain.
Practical and Social Implications: The research findings will enable the policy makers to tailor the monetary policy decisions in such a way that renewable energy consumption can be promoted and dependence on fossil fuels can be reduced to save the country and its surroundings from the evil effects of carbon emissions on the climate.
Keywords
Renewable Energy Consumption, Monetary Policy, Asymmetric Relationship, Non-linear ARDL Approach, Pakistan
Track
Finance
Session Number/Theme
Finance - Session I
Session Chair
Dr. Hilal Anwar Butt
Start Date/Time
14-6-2025 10:55 AM
End Date/Time
14-6-2025 12:35 PM
Recommended Citation
Jeswani, S., & Hayat, M. (2025). Monetary Policy and Renewable Energy Consumption in Pakistan: Is There an Asymmetric Relationship?. IBA SBS 4th International Conference 2025. Retrieved from https://ir.iba.edu.pk/sbsic/2025/program/89
Monetary Policy and Renewable Energy Consumption in Pakistan: Is There an Asymmetric Relationship?
Purpose: In recent years, increasing concerns regarding environmental degradation have propelled the adoption of renewable energy. Yet, due to a multitude of socioeconomic factors, the ratio between non-renewable and renewable energy consumption remains low. Government policy decisions can be a good catalyst in this regard. Therefore, the current study investigates the Asymmetric effect of Monetary Policy on Renewable Energy Consumption in Pakistan.
Study design/methodology/approach: The study covers annual data from 1990-2021 and uses a Non-linear ARDL approach.
Findings: The Findings from the analyses document that in Pakistan, positive shocks in Monetary Policy i.e. broad money have a significant growing impact on the use of renewable energy, whereas a detrimental shock in Monetary Policy does not significantly increase sustainable energy sources consumption in the long-run. Thus, the Central bank through monetary policy in Pakistan must be persistent and sustainable to foster renewable energy consumption.
Originality/value: Lately, the researchers have shown growing interest in investigating the drivers of the use of renewable energy. However, the investigation of monetary policy as the driver of the use of renewable energy is less known, and this study adds to the body of knowledge in this domain.
Practical and Social Implications: The research findings will enable the policy makers to tailor the monetary policy decisions in such a way that renewable energy consumption can be promoted and dependence on fossil fuels can be reduced to save the country and its surroundings from the evil effects of carbon emissions on the climate.
