Impact of Introduction of Green Resources as Substitute for Oil in Pakistan Harvard Case Solution & Analysis

1.1  Introduction

             All the economies around the globe are facing the issues, challenges and the opportunities associated with high demand for the energy in order to sustain the development and the economic growth of their countries. However, this demand comes along with one of the dire facts related to the resources which are utilized by these countries and all the conventional sources of the energy on which the economic growth is dependent are, such as the fossil fuels are rapidly depleting. The impacts on the environment as a result of the conventional sources of energy are also alarming regarding their impact upon the environment and the atmosphere.

The large and the increasing gap between the supply and demand of electricity and the rapid increase in the costs associated with air pollution and the fossil fuels which are imported show that there is an increased need for searching alternative, environment friendly, reliable and the most cost effective sources of energy. As a result of these problems and challenges, there has been a lot of research in this area around the world with the objective of developing green energy sources around the globe. The green energy has become increasingly popular worldwide where different countries globally are trying to make it a substitute for oil. Green energy sources are basically the sources of energy which are more environmental friendly.

Those firms which engage in green energy and use green energy for their large scale commercial purposes tend to emit fewer harmful emissions and radiations which have a minimal negative impact on the surrounding environments and the atmosphere. Major innovations are also taking place in the area of green energy and the growth of green energy as a substitute for crude oil has also been growing rapidly with a growth rate of 9%. Pakistan is one of the rapidly growing countries around the world and the need for the energy usage is also growing at the same phase. However, the current energy crisis which is being faced by the country has led towards extensive research being conducted and utilizing the indigenous and renewable sources of energy.

The major firms in Pakistan require electricity to operate their large plants and this has shown that electricity is one of the most integral part of the national growth and the economical development of the country. However, a worst crisis of electricity is being faced by Pakistan. The electricity which is required for production and consumption by the Pakistani companies is heavily tilted to 37% approximately to the electricity oil and heat of the total electricity oil(Khalil, 2005). This is the reason that renewable energy also called as green energy could be used to overcome the growing energy crisis which is being faced by the country and in this way the government of Pakistan would also be able to overcome the issues with the energy security measures.

Around 97 million people of Pakistan’s total population live in the rural areas with just 7 million homes. 38% of the people out of the total Pakistani population live in areas without electricity according to one of the published reports by the International Energy Agency. Within the complete rural population of Pakistan, 54% of the people living in the rural areas have access to electricity which forces them to live a life of social inequality and poor life of poverty(K., 2008). Electricity plays a major role in the socio economic development and economic stability of the country. This is the reason due to which the use of the renewable energy resources tends to have playing effects and has crossed many positive effects regarding the economic sustainability and social sustainability of the economy of Pakistan.

Electricity is an important source of energy for not just lighting up the houses and providing power to the vehicles but the major industries require electricity to operate their running machines in their respective industrial units. The main challenges which are being faced by the government of Pakistan are to deal with the rapidly growing demand for energy for operating the major industries and granting the electricity for the deprived areas of the country which are to be dealt by the government of Pakistan. Furthermore, the energy infrastructure of the country is not developed well and most of the industries consider the energy infrastructure of Pakistan to be under developed which is being managed disappointingly. Severe energy crisis are currently being faced by Pakistan. Despite the fact that the demand for the energy is increasing rapidly and continuously and the economic growth of Pakistan, there have been no serious efforts made by the government of Pakistan regarding the new capacity generation installation in the country............................

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