Beschreibung:
Pakistan is presently in the phase of industrialization and urbanization, which is characterized by rigid energy demand and supply. This plays an imperative role in the economy, but the carbon dioxide emissions (CO2Es) from fossil fuels increases. As per research objectives, the current study develops a translog production method to analyze the potential of inter-factor and inter-fuel substitution between labor, capital, natural gas, electricity, and petroleum. The ridge regression technique is employed to avoid the multicollinearity issue in the data. Moreover, the model’s outcomes are employed to investigate the output elasticity, substitutability among pairs of factors and then estimate the CO2Es mitigation coming from the fuel. Outcomes confirm that: (1) all the output elasticities are rising, which shows that all the factors are contributing to economic development. (2) All the input pairs (i.e., capital-petroleum, capital-electricity, labor-electricity, capital-natural gas, and natural gas-electricity) are highly substitutes which are clear in capital growth and production capacities. (3) The technical progress seems a little slow between 3% and 7%, but showing evidence of convergence. Finally, under 5% and 10% investment scenarios in petroleum reduction, the CO2Es would decrease by 7.5Mt and 10.43Mt under scenario 1 and 7.0Mt and 10.9Mt under scenario 2. Therefore, the outcomes have wider implications for energy-saving policies, especially in developing countries. Further insights into future CO2Es are provided below