Energy Crisis in Pakistan and Economic Progress: Decoupling the Impact of Coal Energy Consumption in Power and Brick Kilns

Abstract

This study aims to examine the impact of coal energy consumption on the economic progress in Pakistan by using annual time series data during 1972–2019. Three-unit root tests were employed to rectify the variables’ stationarity. The quantile regression approach with the extension of cointegration regression test was utilized to check the variables interaction with the economic progress. The outcomes of the quantile regression uncover that coal energy consumption in power sector and coal energy consumption in brick kilns have adverse influence to the economic progress, while total coal energy consumption has a productive association with the economic progress. Similarly, the findings of cointegration regression analysis uncover that via FMOLS (Fully Modified Least Squares) and DOLS (Dynamic Least Squares) that variables coal energy consumption in power sector and brick kilns have an adverse connection with the economic progress, while total coal energy consumption uncover a productive linkage to the economic progress in Pakistan. Pakistan is still facing a deep energy crisis because of the lack of energy production from cheap sources. New possible policies are required in this direction to improve the energy sector by paying more attention to the alternative energy sources to foster the economic progress.

Keywords

• coal production
• energy crisis
• power sector
• environment
• economic progress
• quantile regression