Abstract
The study attempts to analyze the impact of hybrid energy systems on environmental sustainability in the context of the circular economy network. The hybrid energy sources follow the principle of circular economy, which aims to reduce raw material use and waste which is very fruitful in promoting environmental sustainability. However, the study uses quarterly data from Pakistan from 2011Q1 to 2020Q4 to accomplish the proposed study objective. The study constructs 5 hybrid systems of energy to analyze the impact and applies Auto Regressive Distributive Lag Model (ARDL) to estimate the results. It is found that electricity generation through solar photovoltaic (SPV), wind turbine (WND), hydroelectricity (HYDE) and nuclear power generation (NPG) play a positive role in increasing environment sustainability. The results explain that SPV, NPG, and HYDE contribute 2.29%, 2.04%, and 0.42% to environmental sustainability, respectively. Hybrid systems of energy (Hybrid 1,2,3,4 and 5) positively impact ecological sustainability, but the intensity of each hybrid system in sustaining the environment is different. Among five hybrid systems, the hybrid-5 (SPV-WND-HYDE-NPG) energy system is more environmentally friendly and has the highest contribution towards environmental sustainability. The study suggests incorporating hybrid energy systems provides the means of transition toward a circular economy, ultimately promoting ecological sustainability. The study proposes to the officials of the Pakistani government and policymakers to initiate effective policies to encourage hybrid energy systems because the significance of hybrid systems ensures a low carbon economy and makes a path towards sustainable economic development.