INP-WealthPk
Speedy Transition to Renewable Energy Need of The Hour
February 24, 2022
By Muhammad Mudassar
ISLAMABAD, Feb 24 (INP-WealthPK): Pakistan’s energy sector is a prominent contributor to the greenhouse gas (GHG) emissions.
According to the United States Agency for International Development (USAID), Pakistan’s energy sector contributes 46% of the country’s total annual GHG emissions, of which 26% is attributed to electricity consumption, 25% to manufacturing, 23% to transportation and the remaining 25% to other energy subsectors.
The World Bank and the Asian Development Bank estimate that Pakistan is suffering an economic loss of $3.8 billion annually due to climate change.
According to the ministry of climate change, Pakistan is contributing 0.9% to global GHG emissions.
Pakistan is highly vulnerable to the harmful impacts of climate change, which is affecting the country in the form of floods, heat waves, change in rainfall patterns, sea-level rise due to melting glaciers and other climate-induced natural disasters like droughts etc.
Solutions: Renewable Energy
Renewable energy is one of the best solutions to reduce the GHG emissions.
According to Pakistan Economic Survey 2020-21, thermal share in electricity generation was 60%, hydel 31%, nuclear 7% and renewable energy just 2%.
While the world is moving from fossil fuels to clean and green energy sources, Pakistan is still to fully embark upon the energy transition course, despite the fact that the country is blessed with prodigious renewable energy resources like solar, wind and biogas.
According to the World Bank, just around 0.071% of the country’s total area can help meet Pakistan’s current electricity demand through laying of infrastructure for solar photovoltaic (solar PV) power generation. Pakistan also has several well-known wind corridors with average wind speeds of 7.87m/s in 10% of its windiest areas.
Government Initiatives
The government targets to cut the carbon emissions by 50% till 2030, largely with the help of foreign funding. Currently, Pakistan heavily relies on imported fuels to produce energy, which is not only a big drain on its foreign exchange, but is also a greater source of environmental pollution.
The heavy reliance on imported fuels can be measured from the fact that the country imported oil worth $11.4 billion in the fiscal year 2020-21, 9.6% more than the $10.4 billion worth of oil imported in the fiscal year 2019-20.
According to estimates, crude oil’s local extraction and imports reached 68.9 million barrels in July-March 2020-21 as compared to 58.6 million barrels in the corresponding period of the last year.
The government’s launch of the Electric Vehicle Policy 2020-25 was a step in this direction to tackle the issue of climate change. Under the policy, the government aims to shift 30% of vehicles on electricity by 2030.
The Electric Vehicle Policy extends incentives to both the investors and consumers. The investors have been given different tax benefits in the form of 1% customs duty and 0% taxes (sales tax, income tax) on the import of equipment and machinery for production of electric vehicles. As far as consumers are concerned, electric vehicle owners will have to pay only 50% of the total toll tax.
To mitigate the effects of climate change, the government has also taken some mega initiatives in the forestry sector like the launching of Billion Tree Tsunami Project in Khyber Pakhtunkhwa followed by Ten Billion Tree Tsunami Project across the country.
For realising the full potential in green energy sources, the government should evolve comprehensive programmes for the development of the renewable energy industry and markets based on research and development, supportive infrastructure, financing mechanisms, and the use of market-based instruments such as renewable portfolio standards, green pricing, feed-in tariffs, net metering, and tradable renewable energy certificates.
The government should also promote the use of greener sources of energy in the countryside by ensuring provision of inputs to people to install biogas and solar-powered units.
