ECONOMIC ANALYSIS OF ENERGY ALTERNATIVES IN PAKISTAN: A CONJUNCTURE OF FACTORS MATRIX AND COST BENEFIT APPROACHES

Abstract

Pakistan is facing perpetual and worsening energy crisis. For vision 2025 as announced by Government of Pakistan in 2015, the most important litmus test is to overcome energy crisis with imaginative and innovative choices of energy alternatives. The complexity of selecting the best energy alternative is more pronounced in case of Pakistan as many socio-economic and environmental factors influence the choice. Our country is blessed with both renewable and nonrenewable energy alternatives and we have to select feasible alternatives for implementation to reduce exiting increasing gap between energy supply and demand. Economic analysis of alternatives using cost benefit analysis (CBA), though gives better monetary picture but, does not cover the whole spectrum of social, environmental, political and ethical aspects which are pertinent for selection of suitable energy alternatives in case of multidimensional society of Pakistan. Therefore, this research was aimed to develop a versatile and comprehensive framework for the socio-economic 133 analysis of renewable and non-renewable energy alternatives based on factors matrix comprising socio-economic and environmental factors. Within the factors matrix approach, three methods were used for analysis of energy alternatives; the statistical analysis of factors matrix to obtain trend and ratings, digital analysis of the data by computer assisted qualitative data analysis software (CAQDAS) to get the digitally iterated and attenuated models along with representative economathical equations and economathical analysis of equations by Newton-Leibniz integration process to obtain numerical value of the ratings. Based on the results obtained, a trend spectrograph has been prepared for the entire country south to north. The results obtained from factors matrix approach were compared with those obtained from the three constituent methods of cost benefit approach which indicated that use of both approaches in conjuncture is a necessity in Pakistan to cover multidimensional aspects in case of economic analysis of energy alternatives. At the end, policy recommendations have been given in the context of vision 2025. Overall, thesis is a unique combination of theoretical, digital and mathematical economics. Key words: Socio-economic, analysis, energy, alternatives, factors, matrix, digital, economathical, spectrograph. JEL Classification: O22, O55, Q42, Q48.