Political Economies of Clean Energy Transition in Pakistan

Pakistan being a developing country has less than 1% share in global Greenhouse Gas Emissions (GHG). Electricity supplies are heavily relied upon imported thermal fuels (66% of 40 gigawatt capacity) making electricity prices unaffordable for consumers hampering country economic growth. 26% population does not have electricity access. Pursuant to objectives of United Nations Sustainable Development Goal 7 (SDG7) i.e. ensure access to affordable, reliable, sustainable and modern energy for all by 2030 and Paris Agreement to keep global warming below 1.5 degree Celsius by achieving Net Zero Emissions (NZE). Country has made pledge of clean energy transition (CET) targeting (i) 60% share of renewable energy, 30% of electricity vehicles, doubling energy efficiency, 50% reduction in its projected emissions by 2030 in Nationally Determined Contributions (NDC) 2021 (ii) electricity market transformation from Single Buyer to Multiple Buyers Wholesale Competitive Market. However CET is facing multifaceted socioeconomic, technical, institutional and regulatory barriers. Accordingly, the project addresses the research question: what combination of policies, incentive frameworks and technological interventions are required for successful implementation of CET in Pakistan?

Globally energy end use is largest source (75%) of GHG; its cost-effective decarbonisation is possible through renewable based electrification to maximum extent. Two third of world electricity is generated by fossil fuels, achieving NZE will require decarbonisation of 80% electricity. Countries are setting renewable targets to move away from coal-based generation. The pace of decarbonisation depends upon country political and economic circumstances. CET in South Africa was politicized process due to reliance on fossil fuels contrary to Brazil having low carbon intensity electricity system. Socio-economic challenges for CET are electricity prices, utilities business models and partisan policy support for renewables. Policies in Pakistan are generally driven by economic priorities due to limited fiscal space. During 2007 to 2020, energy crisis cost country $82 billion GDP loss. Policy, financial, infrastructure, institutional and regulatory barriers could undermine CET benefits.

Subject Research aims to support policymakers in making informed decisions by identifying best combination of policies, incentive mechanisms and technological intervention to achieve CET targets in socially, environmentally and economically viable manners leading towards achievement of NDCs and SDG7.

Mixed methods will be used to develop a Policy and Decision Support Techno-Economic Model (Model) for evaluating impact of CET on economic efficiency of electricity sector and country socio-economic development. Under scenario based approach, energy and emissions modeling will be carried out to evaluate techno-economic, financial and social implication of each scenario.

Qualitative analysis will be carried out through experts' interviews, focus groups discussions, surveys, secondary data collection and extensive desk review of policies, plans, national & international reports on energy transition. Under quantitative analysis, the emissions-energy-economy relationship will be determined. Socio-economic impact of CET will be worked out as function of annual electricity generation, levelized cost of electricity, emissions-energy-economy relationship, social welfare and country economic output.

Project is planned to be carried out in collaboration with Sustainable Development Policy Institute, Pakistan premier research and policy think tank. The expected timeline of completion is thirty six months anticipating vital benefits for Pakistan energy sector sustainability.