Analysis of energy consumption and change structure in major economic sectors of Pakistan

by Qianwen Bai, Muhammad Yousaf Raza

Studying and analyzing energy consumption and structural changes in Pakistan’s major economic sectors is crucial for developing targeted strategies to improve energy efficiency, support sustainable economic growth, and enhance energy security. The logarithmic mean Divisia index (LMDI) method is applied to find the factors’ effects that change sector-wise energy consumption from 1990 to 2019. The results show that: (1) the change in mixed energy and sectorial income shows a negative influence, while energy intensity (EI) and population have an increasing trend over the study period. (2) The EI effects of the industrial, agriculture and transport sectors are continuously rising, which is lowering the income potential of each sector. (3) The cumulative values for the industrial, agricultural, and transport sectors increased by 57.3, 5.3, and 79.7 during 2019. Finally, predicted outcomes show that until 2035, the industrial, agriculture, and transport incomes would change by -0.97%, 13%, and 65% if the energy situation remained the same. Moreover, this sector effect is the most crucial contributor to increasing or decreasing energy consumption, and the EI effect plays the dominant role in boosting economic output. Renewable energy technologies and indigenous energy sources can be used to conserve energy and sectorial productivity.