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Pakistan’s Energy Sector Issues: Energy Efficiency and Energy Environmental Links


  • Tariq Husain

    () (Former Director, World Bank.)


This paper analyzes Pakistan’s energy sector issues and highlights (i) the importance of the link between energy and the environment, and (ii) the central importance of energy efficiency for high return demand-side solutions to meet the country’s energy needs. The paper argues that energy planning should integrate the external cost of energy use in deciding about the composition of supply: coal, oil, gas, hydropower, renewable, nuclear, and solar. By utilizing external cost estimates made by the European Commission for Europe, and the US National Academy of Sciences, a total cost (external + internal) ranking of primary energy sources for Pakistan is estimated. This estimate is at the low end of the cost spectrum because classic pollutants—sulfur dioxide, nitrogen oxides, carbon monoxide—in Pakistan are significantly higher than in Europe or the US. The paper also discusses the experiences of China and OECD countries in increasing energy-wide efficiency. A central lesson emerging from the analysis is that Pakistan will have to significantly increase its energy-related research and development expenditure in order to adequately address its energy sector issues. A quadrupling from 0.25 % of gross domestic product is recommended over a decade.

Suggested Citation

  • Tariq Husain, 2010. "Pakistan’s Energy Sector Issues: Energy Efficiency and Energy Environmental Links," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(Special E), pages 33-59, September.
  • Handle: RePEc:lje:journl:v:15:y:2010:i:sp:p:33-59

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    References listed on IDEAS

    1. Richard Simeon, 2009. "Constitutional Design and Change in Federal Systems: Issues and Questions," Publius: The Journal of Federalism, Oxford University Press, vol. 39(2), pages 241-261, Spring.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Rafi Amir-Ud-Din, 2014. "From Energy Blues to Green Energy: Options Before Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(4), pages 309-325.

    More about this item


    Energy; policy; environment; Pakistan.;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics


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