Unlocking green power:How do institutional quality,innovative technologies and foreign aid drive clean energy in Pakistan?
Annotatsiya
Affordable and clean energy (Sustainable Development Goals, SDG 7) is taking center stage in Pakistan, where the country is experiencing increasing energy deficits, electricity demand and serious environmental degradation. Thus, it will be essential to identify the factors that will push towards the use of clean energy to realize long-term sustainability. Therefore, this study explored the long-term relationship between clean energy (SE) as dependent variable and Economic growth, Institutional Quality (IQ), Innovative Technology (IT), Foreign Aid (FA) as independent variables and internation of IQ and Gross Domestic Product (GDP) in Pakistan. For empirical results, this study employed Autoregressive Distributed Lag (ARDL) Bond test approach from 1996 to 2024. The findings from this study validate the long-term relationship between the variables; however, the results reveal that GDP, IQ and FA have significant negative impact on SE in Pakistan, indicating that current macroeconomic and institutional framework of Pakistan is ineffective in transforming economic expansion into clean energy, along with external funds allocation directed towards more general projects instead of energy-specific ones. In contrast, IT poses a significant positive impact on SE, underscoring the importance of technological advancements in supporting clean energy. Although IT has positive effects on adoption of clean energy, inconsistency in regulation because of poor institutional quality sabotages all these relations and leads to fragmentation and inconsistent policies that will perpetuate subsidies on fossil production and hence, curtails the adoption of mass adoption of clean energy resources. This study highlights the urgent need for governance reforms, sector-specific foreign aid allocation, and investment in innovative technologies to strengthen institutional capacity and transparent foreign aid allocation to strengthen clean energy infrastructure.