Turn on the lights: Macroeconomic factors affecting renewable energy in Pakistan

The objective of the study is to examine the relationship between macroeconomic factors (i.e., population growth; urbanization, industrialization, exchange rate, price level, food production index and live stock production index) and renewable energy in Pakistan over a period of 1975–2012. In addition, this study uses oil rent as an intervening variable to overcome the biasness of the single equation model. The results indicate that macroeconomic factors positively contributed to renewable energy consumption in Pakistan. The causality test indicate that there is a unidirectional causality running towards macroeconomic factors to renewable energy in Pakistan, however, renewable energy Granger cause oil rent but not via other route. In addition, there is bidirectional causality between exchange rate and live stock production in Pakistan. Variance decomposition analysis shows that economic growth has a major contribution to increase renewable energy in Pakistan.

[1]  Muhammad Mushtaq Khan,et al.  Energy for economic growth, industrialization, environment and natural resources: Living with just enough , 2013 .

[2]  Kamaruzzaman Sopian,et al.  Renewable energy in five South East Asian countries: Review on electricity consumption and economic growth , 2013 .

[3]  S. Johansen.  STATISTICAL ANALYSIS OF COINTEGRATION VECTORS , 1988 .

[4]  J. Rentschler,et al.  Oil Price Volatility, Economic Growth and the Hedging Role of Renewable Energy , 2013 .

[5]  Munawar A. Sheikh,et al.  Energy and renewable energy scenario of Pakistan , 2010 .

[6]  Hafiz Bilal Khalil,et al.  Energy crisis and potential of solar energy in Pakistan , 2014 .

[7]  Hiro Y. Toda,et al.  Statistical inference in vector autoregressions with possibly integrated processes , 1995 .

[8]  Khalid Zaman,et al.  RETRACTED: Causal links between greenhouse gas emissions, economic growth and energy consumption in Pakistan: A fatal disorder of society , 2013 .

[9]  Shih-Chien Chien,et al.  Renewable Energy Distribution and Economic Growth in the U.S. , 2013 .

[10]  S. Johansen,et al.  MAXIMUM LIKELIHOOD ESTIMATION AND INFERENCE ON COINTEGRATION — WITH APPLICATIONS TO THE DEMAND FOR MONEY , 2009 .

[11]  Lena Osterhagen,et al.  World Development Indicators 2010 , 2010 .

[12]  S. Muhammad,et al.  Environmental Kuznets Curve in an Open Economy: A Bounds Testing and Causality Analysis for Tunisia , 2014 .

[13]  Muhammad Shahbaz,et al.  Revisiting the Environmental Kuznets Curve in a Global Economy , 2013 .

[14]  Angeliki N. Menegaki,et al.  Growth and renewable energy in Europe: Benchmarking with data envelopment analysis , 2013 .

[15]  Yongxiu He,et al.  Interactions between Renewable Energy Policy and Renewable Energy Industrial Policy: A Critical Analysis of China's Policy Approach to Renewable Energies’ , 2013 .

[16]  Ioannis N. Kessides,et al.  Chaos in power: Pakistan's electricity crisis , 2013 .

[17]  C. Granger,et al.  Co-integration and error correction: representation, estimation and testing , 1987 .

[18]  Hooi Hooi Lean,et al.  Natural Gas Consumption and Economic Growth in Pakistan , 2013 .

[19]  鳥居 泰彦,et al.  世界経済・社会統計 = World development indicators , 1998 .

[20]  W. Fuller,et al.  Distribution of the Estimators for Autoregressive Time Series with a Unit Root , 1979 .

[21]  A. Aslan,et al.  Renewable energy consumption–economic growth nexus in Turkey , 2013 .

[22]  Hsin-Chia Fu,et al.  Renewable energy, non-renewable energy and economic growth in Brazil , 2013 .

[23]  Suhail Zaki Farooqui,et al.  Prospects of renewables penetration in the energy mix of Pakistan , 2014 .

[24]  B. Saboori,et al.  Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia , 2013 .

[25]  Ilhan Ozturk,et al.  On the relationship between energy consumption, CO2 emissions and economic growth in Europe , 2010 .

[26]  Janice Yim Mei Lee,et al.  Examining the bi-directional long run relationship between renewable energy consumption and GDP growth , 2013 .

[27]  Muhammad Shahbaz,et al.  Environmental Kuznets Curve hypothesis in Pakistan: Cointegration and Granger causality , 2012 .

[28]  Muhammad Shahid Hassan,et al.  Coal consumption: An alternate energy resource to fuel economic growth in Pakistan , 2013 .

[29]  Muhammad Shahbaz,et al.  Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia , 2011 .

[30]  W. Fuller,et al.  LIKELIHOOD RATIO STATISTICS FOR AUTOREGRESSIVE TIME SERIES WITH A UNIT ROOT , 1981 .

[31]  Juncal Cuñado Eizaguirre,et al.  Oil Prices, Economic Activity and Inflation: Evidence for Some Asian Countries , 2004 .

[32]  Richard J. Smith,et al.  Bounds testing approaches to the analysis of level relationships , 2001 .

[33]  James G. MacKinnon,et al.  Numerical Distribution Functions for Unit Root and Cointegration Tests , 1996 .

[34]  I. Ozturk,et al.  Causality Among Carbon Emissions, Energy Consumption and Growth Inindia , 2012 .

[35]  Zeeshan Ali Khan,et al.  Recent progress in renewable energy – Remedy of energy crisis in Pakistan , 2014 .

[36]  I. Ozturk,et al.  CO2 emissions, energy consumption and economic growth in Turkey , 2010 .

[37]  N. Apergis,et al.  Another Look at the Electricity Consumption-Growth Nexus in South America , 2013 .

[38]  Glenn Platt,et al.  Renewable energy aggregation with intelligent battery controller , 2013 .