Revealing the Dynamic Influence of Clean Energy Consumption on Economic Sustainability in Pakistan: A Pathway to Sustainable Development

Abstract

Abstract Ensuring economic sustainability becomes a crucial consideration when examining the dynamic consequences of both clean and dirty energy consumption. This study seeks to analyze the influence of clean and dirty energy consumption, labor force, technological innovation, and capital formation on Pakistan's economic viability spanning from 1975 to 2022. To achieve this, we investigated these relationships utilizing a dynamic ARDL simulation model. The study findings indicate that clean energy consumption positively affects economic sustainability in both the short and long term. On the other hand, Dirty energy use has short-term benefits, it has long-term detrimental impacts on the viability of the economy. Although labor availability has a short-term negative impact on economic sustainability, it eventually loses significance. Economic sustainability is continuously enhanced by gross capital formation. To enhance economic sustainability, policymakers should prioritize the promotion of clean energy consumption because it constantly has a favorable effect over the long and short term. To reduce long-term drawbacks, a gradual switch from dirty energy is essential. Over time, labor development should change, and it's critical to promote capital formation. The aforementioned actions are intended to build a robust and sustainable future and strengthen Pakistan's economic sustainability.