How to Reduce Energy Intensity in Pakistan?

The study has identified certain factors behind high energy intensity in Pakistan. Poor institutional quality, industrialization and urbanization are found to be responsible for high energy intensity while income per capita and energy prices playing a significant role in reducing energy intensity. For Pakistan being a developing country, both urbanization and industrialization are expected to rise in future along with its adverse impact on energy intensity. But economic policies that increase income will reduce energy intensity, provided income effect is large enough and sustainable to counterbalance the impact of urbanization and industrialization. Similarly, rationalization of energy prices along with good governance practices and better quality of institutions can play an effective role in increasing the efficiency in the use of energy thus reducing overall energy intensity