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Revisiting the relationships between non-renewable energy consumption, CO2 emissions and economic growth in Iran

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  • Nasre Esfahani, Mohammad
  • Rasoulinezhad, Ehsan

Abstract

Exploring the short-run and long-run relationships between consumption of various sources of non-renewable energy, economic growth and carbon dioxide(CO2) emissions would be considered as a golden key to provide rational energy policies of Iran in the post sanctions era. The aim of this paper is to find these mentioned relationships by using the Johanesen cointegration approach, the VECM Granger causality test, Generalized impulse responses functions and variance decomposition in Iran for the period 1966-2013. The findings support evidence for the existence of long-run linkage between non-renewable energy consumption, economic growth and CO2 emissions. The short-run relationship examination proves the causality running from non-renewable energy consumption to economic growth in Iran. The variance decomposition highlights that economic growth changes are explained more by gas consumption than by consumption of other non-renewable energy resources. Furthermore the contribution to CO2 emissions is mainly from oil consumption. The study recommends some new policy insights for Iran in order to reach a higher economic growth by non-renewable energy resources, while lower carbon dioxide emissions.

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  • Nasre Esfahani, Mohammad & Rasoulinezhad, Ehsan, 2016. "Revisiting the relationships between non-renewable energy consumption, CO2 emissions and economic growth in Iran," MPRA Paper 71124, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71124
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    More about this item

    Keywords

    Economic growth; CO2 emissions; Energy consumption; Iran.;
    All these keywords.

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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