About two-thirds of the primary energy requirements of Pakistan are met through conventional sources mainly fossil fuels while traditional biomass accounts the remaining one-third. Fossil fuels has 88% share in the total primary commercial energy supply. Majority of the people living in rural and sub-urban areas uses traditional biomass in inefficient cook stoves. In this article, energy utilization and associated environmental problems are discussed and their possible solutions for future are investigated and proposed. The production, conversion and consumption of fuels is a major source of air pollutants and Greenhouse Gases (GHGs). The presence of air pollutants in the atmosphere could cause damage to the ambient biosystem, acid rain and health hazard for people. The GHGs are seemed to be changing the Climate. The destabilization of the global climate destroys natural ecosystem and increases natural disasters, such as violent storms, floods, droughts etc. The paper concludes that the conservation of energy, substitution of fossil fuels with renewable energy sources, substitution of traditional biomass with biogas and solar energy, substitution of oil with natural gas and bio-fuels, and utilization of coal with clean coal technologies could contribute substantially in environmental pollution and associated impacts control in Pakistan.