Question

The question of security of supply arises everywhere, even in countries producing oil, gas or coal. In addition, the themes of affordability in globally competitive economies are at the heart of the concerns of policy makers. Finally, the environment is the legacy we will leave to our children. Whether it is local pollution or the fight against climate change, sustainability remains the vital priority. These 3 priorities constitute what is generally defined as energy policy. Yet around the world, these priorities are being challenged. Energy policies are often rethought, sometimes under the name of energy transition. This concept is based on very different definitions from one country to another. How can energy economics, could and should support tomorrow's energy policy choices? Should we turn the tables and rebuild these policies from tomorrow's energy demand to determine the necessary supply?

Answer 1

Energy security is a question of national strategy since World War I when Churchill shifted the power source of the British Navy to oil from coal. However, after the oil price shock of 1973, the concept of energy security has changed in a way to less reliance on uncertain oil supplies which has socio-economic and environmental consequences as well. Moreover, large reliance on imported energy would result in large foreign exchange expenditures, expensive energy, and high cost of production, less competitiveness, high CO2 emissions, psychological cost and much more. Reducing dependence on imported fuels and diversifying energy sources for production of electricity is an important policy direction to enhance energy security which also leads to reduction in emissions and promote economic development. Implementation at small and medium scale is an important feature of renewable which can also be adopted as off-grid solution. Having this perspective in mind, the world has changed its focus from imported expensive energy sources to cheaper renewable sources, bringing socio-economic and environmental sustainability in the country.
Energy security is also a matter of concern to power blackout, meaning thereby electricity supply must be uninterrupted whereas the key lies in diversification of energy resources along with optimal utilization of indigenous resources. Robustness of electricity supply is one of the important perspective to increase reliability which depends on the capacity or adequacy to meet the demand and security which measures responsiveness of facilities to shocks within the system . It is really a challenge for the developing economies, being at initial phase of industrialization, to ensure energy security primarily because of limited financial sources and prevalence of appropriate policies. Thus, reliability, affordability and accessibility along with sustainability are four major components of energy security for any country.
Economies around the globe are facing high energy demand to achieve sustained economic growth. However, the challenge is not only to meet the rising demand but also to put less reliance on the depleting fossil fuels which cause damaging environmental effects. Volatile price dynamics of fossil fuels and widening demand-supply gap of electricity calls for cost effective, environment friendly and reliable energy resources. These factors result in an increasing interest in developing renewable resources. Policy makers globally have largely recognized the significance of relationship between energy and economic progress. That being the case, it's an agreed fact that economic development and energy reinforce each other.
According t, policy makers usually take into consideration the social and economic aspects of energy security for affordability and accessibility of services. Moreover, sustainability of energy supply also requires reduction of emissions to control the absorption capacity of the environment. Extraction or utilization of non-renewable and renewable sources is also a policy issue to control the generation rates . Affordable and sustainable energy supplies not only bring prosperity for the population at large but also help eradicate poverty through various direct and indirect channels. Pakistan's Vision 2025, while accepting energy security as a challenge, aims to achieve Sustainable Development Goal 7 “Ensure access to affordable, reliable, sustainable and modern energy for all” by 2025. Pakistan is facing worst ever shortfall of electricity supply since year 2007 whereas the reliance on imported thermal resources is an increasing phenomenon since 1990s. Slowdown of economic growth through various channels, such as, social cost and increasing trend in CO2 emissions are the consequences but the policymakers are still insisting on imported sources to fulfill the energy needs.
Increasing requirement of hydrocarbons cannot be avoided with the growing population but its pace can be slowed down through producing power from renewable sources which are sufficiently available domestically. Pakistan is among the top 10 countries facing severe energy crisis [6]. It is meeting 85% of its total petroleum products demand through imports. Out of total demand of 23.6 million metric ton, around 30% of imports, are meant to produce power only. Historically, electricity diversity is downward sloping and CO2 emissions has increasing trend. Pakistan must focus on the modern sources of energy because of their crucial importance in meeting Sustainable Development Goal (SDGs) and making the investment climate better. Accordingly, ensuring fair development process without undermining welfare for future generation should be the criterion. Whereas, more reliance on modern energy use may enable the poor population of developing countries to participate in productive use rather consumptive use leading to improved living conditions [7, 8].
Access to electricity, hence the energy security up to some extent at least, has already been included as a component of Multidimensional Poverty index by the United Nations Development Programme in 2010. Access to electricity and least reliance on imported energy resources should be a major component of national strategy. According to Ban Ki-Moon, “Energy is the golden thread that connects economic growth, social equity, and environmental sustainability.” Due to worst crisis being faced by Pakistan, social and economic development is in declining phase and conventional sources are not enough to meet the energy demand.
The potential of biomass and solar energy in Pakistan is worked out in many previous studies . However, the literature is deficient in providing evidence on energy security to achieve sustainability. To bridge the existing gap, the objective of the study is twofold. First, the present study analyses the existing energy situation to understand the prevailing energy security and sustainability situation in Pakistan. Second, given the importance of energy security in socio-economic and environment sustainability, the present study empirically examines the short run and long run impact of energy security on socio-economic and environmental sustainability by using Johanson Cointegration and Error Correction model. In meeting these objectives, we provide an evidence to the policy makers to focus on indigenous sources for sustainability and to increase the energy security.
we focused on situational analysis using descriptive tools. Section three gives methodology to investigate the long run association among energy insecurity, socio-economic condition and environment. Section four covers the estimation and analysis of results. Finally, section five concludes the study and provide policy recommendations.