Coal efficiency, carbon reduction, and future policy perspective in Pakistan’s economic growth: a decomposition and decoupling approach

Abstract

Pakistan is moving toward the large-scale use of coal. Coal plays a dominant role in Pakistan’s energy mix and is estimated to reach 30% by 2030. The purpose of this study is to analyze coal imports and indigenous reserves in relation to CO2 emissions. In particular, this study constructs the logarithmic mean Divisia index (LMDI) method to see the impact of the factors, decoupling index for the economic relationship, and pollution from coal-fired power plants from 1986 to 2019. The empirical results show that 1) coal consumption and imports are interrelated, while coal production has had the lowest production level since 1986; 2) the energy intensity impact plays a medium role in decreasing coal utilization, followed by the coal share effect; however, the aggregated impact accounts for 0.023% of the total coal use; 3) the economic and population activity effects progressively increase with coal consumption by 0.25% and 0.35%, respectively, with the annual average growth; 4) only “three” decoupling states were observed: expansive coupling, expansive negative decoupling, and weak decoupling. Expansive negative decoupling occurred due to high energy share and energy intensity. Expansive coupling occurred only in 2001 due to rapid growth in coal proportion and a sluggish decrease in energy intensity, and weak decoupling showed a decoupling association between economic growth and coal utilization; and 5) the various coal compositions, such as moisture, volatile matter, fixed carbon, ash, and sulfur, can be evaded by 1.82, 4.83, 5.16, 1.43, and 0.39 Mt currently. Finally, environmental analysis recognized that implementing clean coal technologies significantly saves fuel and, consequently, reduces emissions. This study also discusses further policies.