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Higher oil prices, are they good or bad for renewable energy consumption: The case of Iran?

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  • Mukhtarov, Shahriyar
  • Mikayilov, Jeyhun I.
  • Maharramov, Shahin
  • Aliyev, Javid
  • Suleymanov, Elchin

Abstract

The transition to renewable energy is key for sustainable development. Therefore, one of the sustainable development goals (SDG) of United Nations (UN) is to shift towards clean energy. However, in many resource-rich countries several factors can stand as barriers towards the transition process. In this regard, this paper examines the influence of higher oil price, CO2 emissions, and income on renewable energy consumption in Iran from 1980 to 2019, employing General to Specific (Gets) modeling approach. Estimation results indicated that oil price and CO2 emissions both have statistically significant and negative impact on renewable energy consumption. The negative influence of higher oil prices on renewable energy consumption may be interpreted as sign of satisfaction coming from higher oil prices, which postpones the transition from traditional energy sources to renewable for Iran. Furthermore, we concluded that income does not have a statistically significant influence on renewable energy use. The paper discusses alternative policies to promote renewable energy consumption.

Suggested Citation

  • Mukhtarov, Shahriyar & Mikayilov, Jeyhun I. & Maharramov, Shahin & Aliyev, Javid & Suleymanov, Elchin, 2022. "Higher oil prices, are they good or bad for renewable energy consumption: The case of Iran?," Renewable Energy, Elsevier, vol. 186(C), pages 411-419.
    • Handle: RePEc:eee:renene:v:186:y:2022:i:c:p:411-419
    DOI: 10.1016/j.renene.2021.12.135
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