<p>Pakistan’s energy sector has been in a severe crisis, and many solutions are frequently offered to address this problem based on theoretical justification and the experiences of other nations. Some of these possibilities call for Pakistan to move towards non-fossil energy sources, introduce technological advancements, and develop its financial institutions. Therefore, this study analyses the empirical effects of various policy alternatives on Pakistan’s energy inefficiency from 1965 to 2022. As a result, this study uses the novel dynamic ARDL simulation framework and frequency-domain causality test to better comprehend the likely effects of future policy movements. The findings imply that technological innovation and non-fossil energy adoption can reduce energy inefficiency in Pakistan’s energy sector. However, financial development and GDP positively contribute to energy inefficiency. The study also establishes a causal relationship from non-fossil energy to energy intensity and from technological innovation and GDP toward energy intensity. These insights underscore the intricate relationships shaping the energy landscape and provide valuable guidance to policymakers for a more sustainable future.</p>