The Role of the Price, Income and Efficiency Factors in Iran’s Energy Intensity

Document Type : Research Paper

Authors

Abstract

The main goal of this study is to identify the determinants of the energy intensity in the Iranian economy using annual data for the period 1974-2012. Changes in energy intensity can be seen as related to three factors including price, income, and autonomous energy efficiency improvements (based on technical progress). Moreover the role of energy quality in enhancement of total factor productivity and the reduction of energy intensity are also investigated. Hence, methods such as index decomposition technique, ARDL, 3SLS, and SVAR (Blanchard-Quah approach) models are used for these purposes. Energy intensity decomposition results show that energy consumption inefficiency is the most essential factor that forcing the energy intensity. Estimated results show that there is a linear positive relationship between energy intensity and real income per capita, and the income elasticity of energy demand is larger than unit. Growth in the industry share of production, increase in total factor productivity, and growth of the relative price of energy in long or short term reduce energy intensity. Considering the level of importance, factors related to the TFP, relative price of energy, structure of production, and income will have more impact on the energy intensity, respectively. The policy implication of this research is the energy relative prices reform is just necessary and not sufficient condition for the energy intensity reduction and this policy should be considered with other complementary factors aimed to the technical progress and the TFP improvement.

Keywords

References

ابریشمی، حمید؛ نوری، مهدی و امیر دودابی‌نژاد (1389). «رابطۀ قیمت و بهره‌وری انرژی در ایران: بررسی تجربی هم‌انباشتگی نامتقارن»، فصلنامۀ پژوهش‌ها و سیاست‌های اقتصادی، 1. 1389، 18 (55)، 5-22.
اقبالی، علیرضا؛ گسکری، ریحانه؛ مرادی، مهدیس و هادی پرهیزی (1394). «بررسی شدت انرژی در کشور‌های نفتی و غیر‌نفتی»، تحقیقات اقتصادی 1394 – 110، 1-20.
بنی‌اسدی، مصطفی و رضا محسنی (1393). «اثر شوک‌های دائمی و موقت بهره‌وری بر شدت مصرف انرژی در ایران (کاربرد روش بلانچارد-کوآ)»، فصلنامۀ اقتصاد انرژی ایران، 10، 1393.
بهبودی، داود؛ مهین اصلانی‌نیا، نسیم و سکینه سجودی (1389). «تجزیۀ شدت انرژی و بررسی عوامل مؤثر بر آن در اقتصاد ایران»، مطالعات اقتصاد انرژی، 1389 - 26، 108 – 133.
منظور، داود و لیلی نیاکان (1393). «رابطۀ توسعۀ اقتصادی و شدت انرژی در کشورهای عضو اکو: مدل رگرسیون داده‌های تابلویی آستانه‌ای یکنواخت»، فصلنامۀ پژوهش‌ها و سیاست‌های اقتصادی . 1. 1393، 22 (69) ، 83-106.
Azar, C. & H. Dowlatabadi (1999), "A Review Of Technical Change In Assessment Of Climate Policy." Annual Review of Energy and the Environment 24: 513-544.
Blanchard, O. J., & Quah, D. (1988). The dynamic effects of aggregate demand and supply disturbances (No. w2737). National Bureau of Economic Research.
Brooks, C. (2008). Introductory econometrics for finance. Cambridge university press.
Cleveland, C. J., Kaufmann, R. K., & Stern, D. I. (2000), “Aggregation and the Role of Energy in the Economy”. Ecological Economics, 32(2), 301-317.
Cornillie, J. & Fankhauser, S. (2004), “The Energy Intensity of Transition Countries”. Energy Economics, 26(3), 283-295.
Enders, W. (2008), Applied Econometric Time Series. John Wiley & Sons.
Filipović, S., Verbič, M., & Radovanović, M. (2015). Determinants of energy intensity in the European Union: A panel data analysis. Energy. Forthcoming.
Jung, Y. & Lee, S. H. (2014), “Electrification and Productivity Growth in Korean Manufacturing Plants”. Energy Economics, 45, 333-339.
Kaufmann, R. K. (2004), “The Mechanisms for Autonomous Energy Efficiency Increases: A Cointegration Analysis of the US Energy/GDP Ratio”. Energy Journal, 25.
Jimenez, R., & Mercado, J. (2014), “Energy intensity: A decomposition and counterfactual exercise for Latin American countries”. Energy Economics, 42, 161-171.
 Li, Y., Sun, L., Feng, T., & Zhu, C. (2013), “How to Reduce Energy Intensity in China: A Regional Comparison Perspective”. Energy Policy, 61, 513-522.
 Medlock III, K.B. & R. Soligo (2001), “Economic Development and End-Use Energy Demand”, the Energy Journal, 22(2): 77–105.
 Medlock, K. (2011), Energy Demand Theory. Published In: Hunt, L. C., & Evans, J. (Eds.). (2011). International Handbook on the Economics of Energy. Edward Elgar Publishing.
 Narayan, P. K. (2004), “Reformulating Critical Values for the Bounds F-statistics Approach to Cointegration: An application to the tourism demand model for Fuji”. http://arrow.monash.edu.au/hdl/ 1959.1/36935
 Nishimizu, M. & Page, J. (1991), “Trade Policy, Market Orientation and Productivity Change In Industry”. Trade Theory and Economic Reform: Essays in Honor of Bela Balassa. Cambridge, MA: Brasil Blackwell.
 Pesaran, M.H., Shin, Y., Smith, R.J. (2001), “Bounds Testing Approaches to the Analysis of Level Relationships”. Journal of Applied Econometrics 16 289-326.
 Sadorsky, P. (2013), “Do Urbanization And Industrialization Affect Energy Intensity In Developing Countries?” Energy Economics, 37, 52-59.
 Shahbaz, M., Nasreen, S., Ling, C. H. & Sbia, R. (2014), “Causality between trade openness and energy consumption: What causes what in high, middle and low income countries”. Energy Policy, 70, 126-143.
Shapiro, M., & Watson, M. (1988). Sources of business cycles fluctuations. In NBER Macroeconomics Annual 1988, Volume 3 (pp. 111-156). MIT Press.
 Stern, D. I. (2011), the Role of Energy in Economic Growth. Annals of the New York Academy of Sciences, 1219(1), 26-51.
 Stern, D. I. (2012), “Modeling International Trends in Energy Efficiency”. Energy Economics, 34(6), 2200-2208.
Linares, P. & Labandeira, X. (2010), “Energy Efficiency: Economics and Policy”. Journal of Economic Surveys, 24(3), 573-592.
Gillingham, K. & Palmer, K. (2013), “Bridging the Energy Efficiency Gap”. Resources for the Future, Discussion Paper, 13-02.
International Energy Agency(2014), http://www.iea.org/statistics/ statisticssearch/report/?country=Iran

Files

History

  • Receive Date: 16 June 2015
  • Revise Date: 13 December 2015
  • Accept Date: 14 February 2016

Share

How to cite

Statistics