ABSTRACT

This study aim to analyze the nexus between export diversification and energy security risk in Pakistan and other selected CAREC countries including (Azerbaijan, China, Kazakhstan, Pakistan, Turkmenistan  and Uzbekistan).The study employs  the panel  data methodology including both FGLS and PCSE and for time series analysis Engle Granger Co-integration method is opted for the time period of 1990-2023 to understand the influence of increased in export diversification on other energy related factors including energy security risk, renewable consumption and fossil fuel consumption. As shown through the research conducted through panel data analysis and time series estimation, low export diversification possesses high risk to energy security and raises the burden by depending more on fossil fuel. Export diversification on the contrary can be linked with less dependence on fossil fuel and increase integration of renewable energy. The moderating effect of CO2 emission demonstrate the impact of environmental pressure that greatly affect the relationship between export and energy outcomes. The result underscore that Pakistan should focus more on export diversification that will be facilitated by institutional adjustment and investment in clean energy. In case of CAREC countries trade and climate policy coordinated with international systems such as Carbon Border Adjustment Mechanism (CBAM) can help to switch to sustainable energy regimes and great climate vulnerability.